Markets React to Nvidia Results, AI Spending Debate Intensifies

U.S. stocks moved positively in late trading Wednesday, rising slightly as investors reacted to Nvidia's strong results. While this performance has brought some relief, market players remain cautious and question the ability to maintain the current pace of spending on artificial intelligence in the long term.

Nvidia's revenue and profits rise

Nvidia's fourth-quarter revenue reached $68.1 billion, up 73% year-over-year and 20% from the previous quarter. This growth is mainly driven by strong demand linked to data centers, whose revenues reached $62.3 billion, up 22% compared to Q3 and 75% year-on-year. These results confirm Nvidia's central place in the artificial intelligence ecosystem, which currently supports stock markets.

THE net profit of the company amounts to 42.96 billion dollarsup 94% year-on-year, while gross margins remain around 75%, demonstrating high profitability. CEO Jensen Huang attributes this momentum to the rapid adoption of AI agents by companies, which are investing heavily in the computing power needed to develop these technologies.

These results led to notable movements in the markets, with effects that extended from stocks to cryptocurrencies:

• Semiconductor stocks rose, contributing to the rise in US markets after a choppy start to the week.
• The Nasdaq recorded the strongest gain with +1.26%, while the S&P 500 gained 0.8%, supported by large technology caps.
• Nvidia shares rose 1.37% to $198.31 in after-hours trading, a sign of investor confidence after the publication of the results.
• Major cryptocurrencies also rose ahead of the release, with bitcoin up 7% and ethereum up 12.5%.

Market Reaction and AI Investment Outlook

Furthermore, Nvidia's outlook suggests that investments in artificial intelligence continue to accelerate. Josh Gilbert, analyst at eToro, believes that the latest results confirm a constant increase in infrastructure spendingrepeatedly invalidating the predictions of the most skeptical. The analysis echoes what Jensen Huang said at the World Economic Forum in Davos, where he said AI is still in its infancy and will require trillions of dollars of investment in chips, energy and data centers to support its long-term growth.

However, analysts remain divided on the pace of future investments. Goldman Sachs anticipates a peak in capital spending in 2026, followed by a slowdown, while Ark Invest's Cathie Wood sees the current dynamic as the start of a multi-year investment cycle rather than a peak. Nvidia seems to be more in line with this second vision, with a revenue forecast of $78.0 billion for the first fiscal quarter of 2027, accompanied by a margin of 2%, which suggests continued growth beyond 2026.