AI bubble remains intact for now as Nvidia continues to defy expectations

The world's most valuable company has reported another series of expectation-defying results, lessening fears, for now, of an AI bubble bursting.

Nvidia said its revenue reached another all-time high, hitting more than $200bn (£147bn) in its 2026 financial year, far outpacing Wall Street estimates and the company's own guidance.

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It also recorded the greatest growth from one three-month period to the next in the company's history.

The set of results was described as "absolutely stellar" by Kyle Rodda, the senior financial market analyst at trading platform Capital.com and "monster" by Kathleen Brooks, research director at brokerage firm XTB.

Across many metrics, Nvidia posted remarkable growth: gross profit surpassed $150bn (£110bn) in the 12 months to the end of January. Data centre revenue hit $62bn (£45.7bn) in the most recent three-month period alone as the company said it saw demand from a diverse client base.

Its demand is "broad, diverse and expanding", the company said in a call with investors, while its chief executive Jensen Huang said there was an "exponential" need for computing and therefore demand for his company's chips.

Nvidia also said it expects revenue to go even higher, to $78bn (£57.5bn) during the current three-month period that runs to the end of April.

Why the focus on Nvidia?

These results matter as Nvidia is a major company behind the artificial intelligence (AI) boom, both the skyrocketing tech company valuations and the increasing use and capability of AI in recent years.

The expansion of AI into daily life is being powered by Nvidia computer chips. They are key parts in AI chatbots such as ChatGPT. Nvidia customers are the world's biggest tech companies.

Its financial performance acts as a good proxy for whether demand for AI products is holding up and if the tens of billions of dollars invested in AI by firms are paying off.

As its share price reached stratospheric highs, it boosted the performance of the US's major stock indexes to new records.

In October, it became the first company worth $5trn (£3.83trn), about the same size as the German economy, Europe's largest, and double the UK's benchmark stock index, the FTSE 100.

Why does the AI boom matter?

Building AI infrastructure, through data centre construction, has been a significant contributor to US economic growth, as measured by gross domestic product (GDP).

Faltering AI expansion, therefore, would impact the US economy, the world's largest, which in turn affects the UK and global economies.

What next?

Regardless of the market figures, moves were anticipated, given the attention paid to the results and the significance of the company.

Nvidia shares rose as much as 2% in after-hours trading.

Company executives did strike a note of caution as they warned about some supply chain issues which could stymy delivery.

For now, the AI bubble remains intact but Nvidia results alone may not be enough to calm fears.

(c) Sky News 2026: AI bubble remains intact for now as Nvidia continues to defy expectations