Demand for AI chip sends revenue skyrocketing

Nvidia ( NVDA , Financial ), a leading semiconductor company, announced record sales of $35.1 billion for the third quarter, $2 billion above Wall Street’s forecast. The chipmaking giant reported $19 billion in net income, helped by higher consumption of its artificial intelligence hardware and software products.

The head of the company, CEO Jensen Huang, once pointed out that Nvidia had enjoyed healthy AI-led growth because the age of AI is already here and everyone from businesses to governments across the globe are betting heavily on it. Huang also reassured strong demand for the Blackwell processing platform now in production and the current generation of Hopper processors.

Nevertheless, shares of Nvidia fell nearly 2% after hours to $143.24, largely due to narrowing margins and increased competition. Experts also pointed to challenges such as geopolitical risks associated with relations between Washington and Beijing and the company’s dependence on Taiwan Semiconductor Manufacturing Company (TSM, Financial).

The company has grown to become the world’s most valuable in recent days, overtaking Apple as AI demand rises globally. Big tech companies rely on Nvidia’s chips to run models like ChatGPT, demonstrating their market leadership.

Nevertheless, there are warning voices for Nvidia; the company still has an advantage with its CUDA platform and a first-mover advantage in the AI ​​industry. An AMD spokeswoman couldn’t immediately confirm its shipment numbers, but it looks like the company will have to tread carefully; Blackwell’s rollout, as well as competition from AMD and customer-developed chips, leaves a small margin for error, according to Emarketer Jacob Bourne.

Nvidia has been critical of the industry’s continued shift toward artificial intelligence, with observers seeing its 2025 moves amid experiments around the world.

This article first appeared on GuruFocus.