Nvidia (NVDA) Chief Executive Jensen Huang spoke this week about the future of artificial intelligence, stating that he expects spending on AI infrastructure to reach between $3 trillion and $4 trillion by the end of the decade. He dismissed concerns that demand for AI chips may slow down, telling investors that the industry is still in the early stages of a new cycle. Huang pointed to large capital spending by Microsoft (MSFT), Amazon (AMZN), and other major technology firms as proof that the appetite for computing power is still strong.
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Meanwhile, NVDA shares have dropped over 1.50% in pre-market trading despite beating estimates for earnings.
AI Chip Demand Keeps Nvidia Results Strong
At the same time, Huang highlighted that Nvidia’s products remain in tight supply. He said that both the company’s Hopper processors and its latest Blackwell chips are mostly spoken for through 2026. According to Huang, the pace of investment by hyperscalers, the large companies that run the biggest data centers, is evidence that AI infrastructure spending is far from cooling. He added that Nvidia’s chips help customers process more data while lowering energy use, which keeps the cycle of demand going.
Nvidia’s second-quarter results reflected the same trend. The company reported earnings per share of $1.05, above the $1.01 expected, and revenue of $46.74 billion, higher than the $46.06 billion forecast. Guidance for the current quarter came in at about $54 billion, again ahead of Wall Street estimates. Revenue from the data center unit, which includes AI graphics chips and related networking parts, rose 56% from last year to $41.1 billion. That figure was slightly below analysts’ expectations but still showed strong growth. Chief Financial Officer Colette Kress told investors that demand for AI systems is likely to continue, with trillions of dollars of infrastructure spending expected through 2030.
Meanwhile, Nvidia noted that sales of its H20 processors to China have not yet begun due to trade limits. The firm released $180 million of H20 inventory to a customer outside of China, which contributed to revenue. Executives said that if licenses are approved, the company could see between $2 billion and $5 billion in H20 sales next quarter. In addition, Nvidia noted that Blackwell chip sales climbed 17% from the first quarter and now make up the majority of the company’s data center revenue.
Overall, Nvidia remains at the center of the AI buildout. With capital spending by the largest technology firms still rising, Huang’s forecast reflects his view that the cycle has room to expand in the years ahead.
Is Nvidia Stock a Buy, Sell, or Hold?
Following the earnings report, Wall Street analysts reaffirmed their bullish stance on Nvidia shares. Eleven analysts reiterated Buy ratings, and most raised their price targets. In total, 35 out of 39 analysts now rate the stock a Buy, giving Nvidia a Strong Buy consensus. The average NVDA stock price target is $205, implying an upside of 12.89% from the current level.
