Nvidia announced record-breaking performance, but the sustainability of AI prosperity has been questioned.
Nvidia announced its impressive financial report and optimistic forecast on Wednesday on the East Coast. CEO Huang Renxiong is trying to dispel concerns about the sustainability of AI prosperity it is this prosperity that has propelled the chip manufacturer to the top position in global market value. TD Cowen analysts point out that "Nvidia's systems are all 'running well,' but doubt still lingers in large AI stocks." Despite strong performance, Visible Alpha research director Melissa Otto says Nvidia faces "a lot of concerns" regarding how its reliance on large tech companies and startup clients will fund the billions of dollars in AI infrastructure. She said, These are key issues for the stock, which truly explain why it hasn't risen. We lack much visibility on how the rest of the year will unfold. Analysts are growing increasingly concerned about Nvidia's reliance on a few large-scale cloud service providers and AI startups like OpenAI, which are referred to as "super large-scale cloud service providers."
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