Nvidia shares rise as booming demand for chips, bullish forecast calm worries of AI bubble

Core Insights - Nvidia forecasts fourth-quarter revenue of $65 billion, exceeding Wall Street's estimate of $61.66 billion, driven by strong demand for AI chips from cloud providers [2][5] - The company's performance is seen as a critical indicator for the market, as it reflects the impact of significant investments in AI infrastructure amidst concerns of an AI bubble [1][5] - Nvidia's shares rose over 4% in after-hours trading, recovering from a nearly 8% decline earlier in November, following a remarkable 1,200% increase over the past three years [3] Demand and Market Dynamics - The demand for AI chips has remained robust since the launch of ChatGPT in late 2022, with analysts and investors optimistic about continued growth [3] - Nvidia's CEO, Jensen Huang, reported $500 billion in bookings for advanced chips through 2026, indicating strong future demand [4] - Major tech companies, including Microsoft, are significantly increasing their capital expenditures to expand AI data centers, with Microsoft alone reporting nearly $35 billion in capital expenditure for its fiscal first quarter, half of which was allocated for chips [6]