Nvidia’s earnings results confirm the artificial intelligence investment case remains intact, according to UBS. Wall Street has had a mixed response to Nvidia’s latest earnings report, with the AI chipmaker falling 1% in midday trading Thursday even after a solid second quarter showing. Nvidia topped estimates on the top and bottom lines, but reported data center revenue that fell below estimates. To be sure, the stock is well off its overnight lows. The overall strength of Nvidia’s latest results bodes well for the AI trade, following its recent mishaps. Investors have worried that large cap technology stocks will pull back following their ascent to lofty valuations, but recent indications of lower interest rates have revived interest in the sector. “The outlook for large-cap tech remains compelling,” Ulrike Hoffmann-Burchardi, global head of equities at UBS Financial Services, wrote on Thursday. NVDA 1D mountain Nvidia, 1-day Nvidia’s results also confirm the fundamental outlook for AI companies hold up. Hoffmann-Burchardi pointed out that second-quarter earnings for Big Tech have remained robust — as has forward guidance. AI infrastructure spending is ramping up. UBS recently raised its global AI capital expenditures forecast to $375 billion this year and $500 billion in 2025. Nvidia indicated that resolving issues around selling chips to China, a key overhang for the company, could also unlock $2 to $5 billion in addition revenue next quarter. Meanwhile, a weaker U.S. dollar will boost tech earnings, and sentiment remains far from euphoric levels. “Overall, we expect global tech earnings per share growth of 15% this year and 12.5% in 2026,” read the note.
