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Nvidia’s AI Party Just Started

The chip maker reported another quarter of blockbuster results, driven by soaring demand for AI systems.

Nvidia shares were up 15% in afternoon trading. That helped the Nasdaq Composite climb more than 2%, outperforming its peers.

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The numbers countered a growing worry among investors that a company whose market value has boomed by more than $1 trillion in just the last 12 months couldn’t possibly live up to the hype. Nvidia’s stock had slipped 9% by Wednesday’s closing bell from the all-time high it hit last week.

The stock clawed back much of that loss in after-hours trading following the results.

Revenue for the data center segment that includes the accelerator chips designed for generative AI computing hit $18.4 billion—five times its level from a year ago. Nvidia said during its conference call that it expects data center revenue to keep growing sequentially in the April quarter when it expects total revenue to have tripled from the same period last year.

Nvidia’s long-established practice of projecting only one quarter out still could fuel questions about the longer-term trajectory of its AI business. Semiconductor markets are notoriously cyclical, and Nvidia’s data center business, which has long been selling chips for earlier forms of AI, has proven to be no exception. Growth in that unit has gyrated over the years as cloud computing giants sometimes take “digestion” periods following major purchases.