Nvidia Reports Strong Demand While AMD Partners Microsoft OpenAI

The artificial intelligence sector is currently navigating a complex market environment, marked by both robust growth and investor caution. Nvidia, a key player in AI chips, recently reported impressive earnings and revenue that surpassed analyst expectations, with CEO Jensen Huang noting "off the charts" demand for its Blackwell chips. Despite this strong performance, Nvidia's stock experienced a drop, contributing to a broader market sell-off in AI-related stocks. Major indexes like the S&P 500 and Nasdaq saw declines, as investors expressed concerns over high AI stock valuations and the potential for the Federal Reserve to delay interest rate cuts, especially after a strong September jobs report. Nvidia's data center revenue and earnings are growing rapidly, driven by its Blackwell Ultra chips, and its networking business has expanded significantly to become the largest globally, though its China sales were lower than expected due to US trade restrictions. Meanwhile, Advanced Micro Devices (AMD) is positioning itself aggressively in the AI chip market, projecting its addressable market could reach $100 billion by 2027. AMD anticipates over 35 percent annual revenue growth and a fivefold increase in earnings per share, aiming to capture significant market share in data centers through collaborations with companies like Microsoft and OpenAI. However, AMD faces potential challenges from custom AI chips (ASICs) and uncertainties regarding future AI spending. Despite the recent market volatility, prominent analysts like Michael Ravenna and Dan Ives from Wedbush Securities are advising investors to continue buying "AI winners." Ives, a five-star analyst, believes the AI sector is undergoing a "reality check" but maintains strong confidence in its long-term future, predicting that companies will invest between $3 trillion and $4 trillion in AI over the next few years. He specifically recommends focusing on key AI companies such as Microsoft, Apple, and Google. Beyond chipmakers, venture capitalists are pouring significant funds into AI-powered robotics. Physical Intelligence, a San Francisco-based company developing AI software for robots, secured $20 million in seed funding, led by Khosla Ventures with participation from Jeff Bezos. Similarly, Swiss company Flexion raised $50 million in Series A funding for its humanoid robot software. Even the fast fashion retailer Asos is integrating AI, launching a "Styled for You" feature that suggests outfits based on over 100,000 studio looks, aiming to boost sales which fell 12 percent in the year to August 31. Asos also introduced a new loyalty program, Asos.World, and narrowed its pre-tax losses to £281.6 million, though its shares dropped 8 percent due to disappointing future profit forecasts. These diverse developments underscore the widespread impact and continued investment across various facets of the AI landscape.

Key Takeaways

• Nvidia reported strong earnings and "off the charts" demand for Blackwell chips, yet its stock fell due to broader market concerns over AI valuations and interest rates.
• AMD aims for a $100 billion AI chip market by 2027, projecting over 35% annual revenue growth and a fivefold increase in earnings per share, with plans to partner with Microsoft and OpenAI.
• The stock market experienced mixed reactions, with S&P 500 and Nasdaq futures dropping due to fears about high AI stock valuations, despite Nvidia's strong performance.
• Wedbush Securities analysts, including Michael Ravenna and Dan Ives, recommend buying "AI winners" like Microsoft, Apple, and Google, predicting $3-$4 trillion in AI investment over the next few years.
• Venture capitalists are heavily investing in AI robotics, with Physical Intelligence raising $20 million in seed funding and Flexion securing $50 million in Series A funding.
• Asos launched an AI-powered "Styled for You" feature to suggest outfits and boost sales, which had fallen 12 percent in the year to August 31.
• Nvidia's data center revenue and earnings are growing rapidly, driven by Blackwell Ultra chips, and its networking business is now the largest globally.
• Nvidia's China sales were lower than expected due to US trade restrictions, contributing to investor caution.
• Asos narrowed its pre-tax losses to £281.6 million but saw its shares drop 8 percent due to lower-than-expected future profit predictions.
• Concerns about the Federal Reserve's interest rate policy, influenced by a strong September jobs report, are contributing to market uncertainty around AI stocks.

Asos uses AI stylists to boost sales

Fast fashion company Asos is now using artificial intelligence to help shoppers find outfits. This new "Styled for You" feature suggests clothes based on over 100,000 studio outfits. The company hopes this will help turn around its sales, which fell 12 percent in the year to August 31. Asos also launched a new loyalty program called Asos.World. Despite narrowing losses, its shares dropped 8 percent as future profit forecasts disappointed investors.

Asos launches AI stylists to improve sales

Fast fashion company Asos is now using artificial intelligence to suggest outfits for its customers. This new "Styled for You" tool aims to help boost sales, which dropped 12 percent in the year ending August 31. Asos also introduced a new loyalty program called Asos.World. While the company narrowed its pre-tax losses to £281.6 million, its shares fell 8 percent because future profit predictions were lower than expected. CEO Jose Antonio Ramos Calamonte wants Asos to be a place for style inspiration.

Nvidia stock drops despite strong earnings report

Nvidia's stock fell on Thursday, even after the company reported excellent earnings and future guidance. The chipmaker's shares gave back early gains, causing major stock indexes like the S&P 500 and Nasdaq to drop. Investors worried about high AI stock prices and whether the Federal Reserve would cut interest rates. CEO Jensen Huang said demand for Blackwell chips was "off the charts," but Deutsche Bank analyst Ross Seymore kept a neutral rating due to valuation concerns. Nvidia's China sales were also lower than expected due to US trade restrictions.

AMD aims for 100 billion dollars in AI chip market

Advanced Micro Devices, or AMD, recently shared big plans for its future in AI chips. The company believes its market for AI chips could reach $100 billion by 2027. AMD expects its revenue to grow over 35 percent each year and its earnings per share to increase fivefold. AMD plans to gain market share in data centers, working with companies like Microsoft and OpenAI. However, it faces risks from custom AI chips called ASICs and uncertainty about future AI spending.

Stock market mixed after AI selloff and Nvidia earnings

Stock futures were mixed on Friday as investors worried about the high value of artificial intelligence companies. The S&P 500 and Nasdaq futures dropped, even though Dow futures rose slightly. This followed a Thursday where Nvidia's strong earnings did not calm fears about AI stock prices. Bitcoin also fell 4.6 percent. A strong September jobs report added to uncertainty, as it could mean the Federal Reserve will not cut interest rates soon.

Wedbush advises buying AI stocks despite market slump

Wedbush Securities analyst Michael Ravenna suggests investors buy "AI winners" even though the broader market is currently slumping. This advice comes after Nvidia reported strong earnings, but the S&P 500 and Nasdaq Composite still saw declines. Ravenna believes the AI sector remains a major force for growth and new ideas. He encourages investors to focus on companies set to benefit from the AI revolution, ignoring short-term market changes. Wedbush maintains a positive outlook on the long-term future of AI-related stocks.

Investors fund AI robot software companies

Venture capitalists are investing heavily in companies that combine artificial intelligence with robotics. Physical Intelligence, a San Francisco company making AI-powered robot software, raised $20 million in seed funding. Khosla Ventures led this investment, with other major investors like Jeff Bezos also participating. Separately, Flexion, a Swiss company developing software for humanoid robots, secured $50 million in Series A funding. These investments show a strong belief in the future of AI-driven robotics.

Nvidia continues strong growth silencing AI skeptics

Nvidia continues to impress investors with its strong financial results, silencing those who doubted the AI sector. The company reported earnings and revenue that surpassed analyst expectations, causing its shares to rise. Nvidia's data center revenue and earnings are growing rapidly, driven by its Blackwell Ultra chips. Its networking business also expanded significantly, making it the largest in the world. Despite increasing competition from companies like Broadcom, Nvidia maintains high profit margins and returns cash to shareholders through stock buybacks.

Analyst Dan Ives recommends buying top AI stocks

Five-star analyst Dan Ives from Wedbush Securities advises investors to keep buying top-performing AI stocks. This recommendation comes even though Nvidia's stock recently fell and the broader market is experiencing a slump. Ives believes the AI sector is undergoing a "reality check" but maintains strong confidence in its long-term future. He predicts companies will invest between $3 trillion and $4 trillion in AI over the next few years, leading to major changes. Ives suggests focusing on key AI companies like Microsoft, Apple, Google, and Amazon.

Sources

• Fashion giant introduces new AI stylists to boost falling sales
• Asos using AI stylists to help boost flagging sales
• End of the AI trade? Why Nvidia stock slipped even after stellar earnings
• Could AMD's $100 Billion AI Ambition Make It the Next Great Chip Stock?
• Stock Market Today: S&P 500, Nasdaq Set to Open Down; Dow Futures Rise After AI Selloff; Nvidia, Strategy, Intel, Tesla, More Movers; Bitcoin Price Drops
• Buy 'AI winners,' Wedbush says, as bears 'all come out of hibernation' (NVDA:NASDAQ)
• VCs are funding the AI-powered robot revolution
• 3 Reasons Why Nvidia Just Silenced Artificial Intelligence (AI) Doubters
• ‘Buy AI Winners,’ Says Five-Star Analyst Dan Ives