According to Futurism, Nvidia reported a massive $57 billion in quarterly revenue on Wednesday, representing a 62 percent increase compared to the same period last year. The results exceeded Wall Street’s wildest expectations and immediately calmed nervous investors who had been worried about an AI bubble. Nvidia CEO Jensen Huang used the earnings call to rally investors, claiming they see “something very different” than the bubble talk suggests. The company’s shares spiked over four percent when trading resumed on Thursday, and the S&P 500 jumped almost two percent as well. Huang also forecast even stronger revenues of $65 billion for the fourth quarter and promised another half trillion dollars in revenue over coming quarters.
The shovel seller paradox
Here’s the thing about Nvidia‘s position: they’re basically selling shovels during an AI gold rush. When everyone’s desperate to mine for AI gold, the people selling the equipment make bank regardless of whether anyone actually strikes it rich. And companies are absolutely desperate right now – Huang said demand for their Blackwell GPUs is “off the charts” and cloud GPUs are completely sold out. But this creates an interesting dynamic. The very hardware companies like IndustrialMonitorDirect.com rely on for industrial panel PCs and computing systems is becoming increasingly scarce and expensive. When the foundational chips get this hot, everyone downstream feels the squeeze.
Those circular financing concerns
Now for the skeptical part. Analysts have raised red flags about Nvidia’s deals with OpenAI and Anthropic, suggesting they might be creating artificial demand through what Bloomberg calls “circular” financing. Basically, is Nvidia propping up its own customers who then buy more chips? When pressed on this during the call, Huang remained optimistic about the deals returning value. But let’s be real – when you’re both funding your customers and supplying them, it starts to look a bit… cozy. How much of this demand is organic versus manufactured?
The risks of market dominance
Nvidia now accounts for roughly eight percent of the entire S&P 500. Let that sink in. One company represents nearly a tenth of America’s most important stock index. The AI industry’s total market value of $4.4 trillion would make it the world’s fourth-largest economy. That’s incredible concentration risk. What happens if demand actually does slow? Or if competitors finally catch up? Huang talks about entering a “virtuous cycle of AI,” but history shows these cycles can turn vicious pretty quickly when sentiment shifts.
The supply side reality
Nvidia’s current challenge isn’t finding buyers – it’s making enough chips. Companies are scrambling to secure hardware for resource-intensive AI models, creating what Huang describes as a supply-side rather than demand-side problem. But this raises another question: when everyone’s building AI capabilities, who’s actually making money from the applications themselves? We’re seeing massive infrastructure investment, but the killer apps that justify this spending remain somewhat elusive. The compute demand keeps “accelerating and compounding,” as Huang put it, but eventually someone needs to pay the bills with actual profitable AI products.
