Nvidia Earnings Help Ease Bubble Fears

Market Demand and Growth - The slope of spending on AI compute is continuing to move higher, alleviating concerns about demand [1][2] - The runway for AI compute demand is lengthening, suggesting a multi-year investment cycle [3][4][9] - Sovereign governments are increasing their spending on AI deployments, contributing to NVIDIA's growth [8] - The overall Total Addressable Market (TAM) for AI compute is rising, now estimated in the trillions of dollars [10][11] NVIDIA's Performance and Market Position - NVIDIA's fiscal fourth-quarter outlook is around $65 billion, significantly above consensus [1] - NVIDIA has a $500 billion backlog, with potential for further upside in 2026 [2][3] - NVIDIA owns 90% of the accelerator market, but increased capacity from others may enable them to participate [9][10] - Even if NVIDIA's market share decreases, revenue is expected to continue to grow due to the increasing TAM [12] China Market - The base case assumption is zero revenue from China [5] - There is potential upside if the China situation is resolved, with companies potentially finding ways to work with governments [6] - NVIDIA had a beat and raise without any H20 assumptions in the guidance, indicating strong demand even without China [7]