Nvidia’s Rosy Revenue Forecast Shows the AI Boom Remains Strong

, the world’s most valuable company, gave another bullish quarterly revenue forecast, signaling that the massive build-out of AI computing remains on track.

Fiscal first-quarter sales will be about $78 billion, the chipmaker said in a statement Wednesday. That compares with an Wall Street estimate of $72.8 billion, according to data compiled by Bloomberg.

“Our customers are racing to invest in AI compute — the factories powering the AI industrial revolution and their future growth,” Chief Executive Officer Jensen Huang said in the statement.

The outlook helped soothe concerns about a bubble in AI investments. Huang has repeatedly downplayed fears that the run-up in spending on artificial intelligence hardware isn’t sustainable. He argues that it will take years to replace the world’s installed base of older computers with machines that offer a leap forward in productivity.

But some investors had grown weary of that optimism and traded out of stocks like Nvidia. Wednesday’s report provides some evidence that near-term worries may be overblown.

Nvidia shares, among the 10 worst-performing chipmaker stocks this year, rose about 1% in extended trading following the announcement.

Nvidia is the dominant seller of accelerator chips, processors designed to handle the huge amounts of data needed to create artificial intelligence models. The semiconductors are also used to run the software — a stage known as inference — when it carries out tasks in response to real-world inputs. Nvidia has branched out into general-purpose processors, networking and full computer systems, giving it an even greater hold on customers.