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Fairview HK: Even in difficult economic circumstances, a vital customer continues to spend heavily
Investors were bullish on NVIDIA Corporation (NVDA) today, possibly because of a recent quarterly results call from Meta Platforms Inc. (META), which stated that it is expanding capital expenditures on artificial intelligence (AI) infrastructure
While META's latest quarterly results weighed on its price, management's statements about investing in AI data centres aided NVDA's stock today.
NVDA values META as a customer. The two businesses revealed in January that they were collaborating to develop a huge AI supercomputer utilizing NVDA's data-centre architecture.
NVDA's greatest revenue sector is data-centre sales, which climbed 61% to $3.8 billion in the most recent quarter. On the company's third-quarter results call, META's chief financial officer, Dave Wehner, stated:
We anticipate capital expenditures in the range of $34 billion to $39 billion in 2023, driven by investments in data centres, servers, and network infrastructure. An expansion in AI capacity will account for the majority of our capital expenditure increases in 2023.
When NVDA announces its third-quarter financial results next month, investors will have a better idea of how the firm is performing. It's worth noting that META's boost in AI investment may not be reflected in their quarterly profits for several quarters. It is unclear how big of an impact it will have on NVDA's income.
Aside from the increased META spending, investors are still trying to determine how strong the US economy is right now, and they received some good news today that might help NVDA's stock rise as well.
The United States gross domestic product (GDP) increased by 2.6% in the third quarter, above expert's consensus expectation of 2.3% growth.
That encouraging news, along with META's emphasis on AI expenditure, is expected to drive NVDA's stock up today, alleviating some investor's concerns about a possible recession.
Fairview HK Limited is one of the foremost privately owned Asia-Pacific orientated, boutique wealth management firms in Hong Kong. We offer our services to a selected group of families, family offices, institutions and fund managers, you may visit our website https://fairviewhk.com/