(Bloomberg) — Nvidia Corp. Chief Executive Officer Jensen Huang said the $1 trillion projection he issued a day ago for AI chip sales doesn’t capture other product offerings and signaled that total revenue will surpass that level as the company pushes into new markets.
Nvidia expects to close, book and ship more than $1 trillion in business, Huang said at a company event in San Jose, California. The chipmaker has “strong confidence of $1 trillion-plus,” he told an audience of analysts and investors.
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Less than a day ago, Huang predicted that Nvidia’s flagship AI processors would help generate $1 trillion in sales through 2027, saying computing demand has increased “by 1 million times in the last two years.” The company’s shares jumped as much as 4.8% on the news before leveling off. They were virtually unchanged on Tuesday.
While revenue of that magnitude dwarfs anything his would-be rivals might be able to generate, Wall Street analysts expressed concern that it doesn’t point to accelerating growth. Nvidia had previously forecast that data center gear would bring $500 billion in sales through the end of 2026. The latest forecast extends the outlook another year, doubling the cumulative amount.
“Here’s what I know: Demand is accelerating at a very large scale, and we’ll be able to support with supply,” Huang said on Tuesday.
Huang had announced plans on Monday to push deeper into central processing units — Intel Corp.’s home turf — and introduced semiconductors made with technology acquired from startup Groq. The company said it was also developing chips for data centers in outer space.
On Tuesday, Nvidia said it plans to shift toward using more of its cash for investor returns — in the form of buybacks and dividends — during the second half of the year. The company will take that step when it’s finished funding its investment commitments, Chief Financial Officer Colette Kress said. Nvidia expects to devote about 50% of its free cash flow to those payouts, Kress said.
(Updates with more commentary from event starting in fifth paragraph.)
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