TLDR
- Jensen Huang predicts AI infrastructure spending could reach $4 trillion by end of decade, representing potential $1 trillion revenue opportunity for Nvidia
- Oracle reported massive $455 billion revenue backlog, over 4 times larger than last year, driving GPU demand expectations
- Nvidia stock gained 4% on Wednesday following Oracle’s earnings surprise that shocked Wall Street analysts
- Oracle plans $35 billion in capital expenditures for fiscal 2026, mostly for AI computing infrastructure including Nvidia chips
- Nvidia maintains dominance in AI chip market with annual chip updates and comprehensive AI platform strategy
Nvidia shares climbed 4% on Wednesday following Oracle’s earnings report that revealed a massive revenue backlog. The AI chip giant’s stock surge came as Oracle disclosed $455 billion in total remaining performance obligations.
This figure represents more than four times the size of Oracle’s backlog from the same quarter last year. Wall Street analysts had expected around $180 billion in remaining performance obligations from Oracle.
Ben Reitzes of Melius Research called Oracle’s numbers “astounding” during CNBC’s Closing Bell. He described the backlog as “a very historic kind of print right here from Oracle.”
Oracle plans to deploy $35 billion in capital expenditures during fiscal 2026. Most of this spending will go toward AI computing infrastructure, including Nvidia’s chips.
The Oracle earnings helped ease recent concerns about cooling AI data center spending. These worries had created uncertainty about future demand for Nvidia’s products.
Infrastructure Spending Predictions Drive Long-Term Outlook
Jensen Huang, Nvidia’s CEO, made bullish predictions during the company’s latest earnings report. He forecasts AI infrastructure spending could reach $4 trillion by the end of the decade.
Based on Nvidia’s historical capture of at least 25% of data center spending, this could create a $1 trillion revenue opportunity. The projection comes as Nvidia’s biggest customers continue pouring investment into their AI platforms.
Nvidia reported record revenue of $130 billion in its latest full year. If Huang’s infrastructure spending forecast proves accurate, the company’s already strong revenue could grow substantially.
The company has built an entire platform of AI products and services for all customer types. This ranges from small startups to massive cloud service providers like Oracle.
Nvidia pledged to update its chips annually to maintain market leadership. The company launched the Blackwell architecture late last year and recently released the Blackwell Ultra update.
Market Position and Customer Loyalty Factors
Nvidia currently dominates the AI chip market with its graphics processing units. These GPUs are essential for driving AI tasks, making them crucial tools for AI success.
The company’s revenue climbed 56% in the recent quarter to about $46 billion. Annual revenue soared to $130 billion last year from $27 billion just two years earlier.
Nvidia’s stock has advanced more than 1,100% over the past three years. Investors have cheered the company’s consistent quarterly performance and market dominance.
The tech giant focuses on energy efficiency in its chip designs. Huang claims the company’s performance per watt exceeds rivals, resulting in lower total cost of ownership.
Customers find Nvidia across all major cloud platforms, creating convenience and potential cost savings. This widespread availability may drive ongoing customer loyalty as companies invest the predicted $4 trillion.
Oracle’s massive backlog demonstrates the continued strength of AI infrastructure investments. The cloud provider’s commitment helps validate Nvidia’s growth projections and market position.
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