Concerns that the surge in artificial intelligence could lead to an exaggerated bubble have temporarily subsided, following an impressive earnings report from Nvidia. This report highlighted the crucial role of its chips, elevating Nvidia to the status of the world’s most valuable company.

Nonetheless, the possibility of an AI bubble reemerging is not out of the question as major tech companies prepare to invest trillions in what they perceive as the decisive factor for future technological advancements and market leadership.

For the moment, Nvidia’s recent performance has mitigated the fears that the AI-driven stock market and broader economy, which have been thriving over the past year, might be on the brink of a downturn.

Nvidia’s latest quarterly report suggests that investment in AI is actually gaining even more momentum. The report, released Wednesday, showcased a quarterly revenue of $57 billion, marking a 62% rise compared to the same period last year. This reflects an acceleration from the 56% year-over-year revenue growth reported in the previous May-July quarter.

Additionally, Nvidia projects its revenue for the November-January quarter to hit $65 billion, which would represent a 65% increase from the previous year.

In light of Nvidia’s optimistic forecasts, analysts from UBS, led by Timothy Arcuri, commented that “it is very hard to see how this stock does not keep moving higher from here.” The analysts further noted that the rapid expansion of AI infrastructure is likely to elevate all market participants.

Nvidia’s numbers are viewed through a window that extends far beyond the Santa Clara, California, company’s headquarters because its products are needed by a wide range of companies — including Big Tech peers like Microsoft, Amazon, Alphabet and Meta Platforms — to build data centers that are becoming known as AI factories.

“AI spending isn’t just holding up, it’s accelerating. That’s exactly what the market needed to see,” said Jake Behan, head of capital markets for investment firm Direxion.

The numbers initially lifted Nvidia’s stock price by as much as 5% in Thursday’s trading, while other tech stocks tied to the AI spending frenzy also got a boost. But Nvidia’s shares and other tech stocks backtracked later in the session as investors found other issues besides AI, such as the government’s latest jobs report and the future direction of interest rates.

Even with a slight downturn in its stock price amid the broader market decline, Nvidia remains valued at $4.5 trillion, more than 10 times its valuation three years ago when OpenAI released its ChatGPT chatbot, triggering the biggest technological shift since Apple released the iPhone in 2007.

Nvidia’s rapid rise has turned its CEO Jensen Huang into the chief evangelist for the AI revolution and he sought to use his bully pulpit during a late Wednesday conference call with industry analysts to make a case that the spending to make technology with humanlike intelligence is just beginning.

“There’s been a lot of talk about an AI bubble. From our vantage point, we see something very different,” Huang insisted while celebrating “depth and breadth” of Nvidia’s growth.

Huang is hardly a lone voice in the wilderness. A recent report from Gartner Inc. estimates that worldwide spending on AI will rise to more than $2 trillion next year, a 37% increase from the nearly $1.5 trillion that the research firm expects to be spent this year.

But it remains to be seen if all that money pouring into AI will actually produce all the profits and productivity that proponents have been promising. That leaves the question unanswered if all the real spending that’s happening will be worth it.

The most recent survey of global fund managers by Bank of America showed a record percentage of investors saying companies are “overinvesting.”

Big Tech is already so profitable that many of the most successful finance their spending sprees with their ongoing stream of revenue and cash hoards in their bank accounts. But some companies, such as Meta Platforms and Oracle, are relying more heavily on debt to fund their AI ambitions — a strategy that has raised enough alarms among investors that their stock prices have plunged more dramatically than their peers in recent weeks.

Both Meta and Oracle have suffered more than 20% declines in their stock prices since late October.

But other Big Tech powerhouses leading the way in AI remain just behind Nvidia and iPhone maker Apple in the rankings of the most valuable companies. Alphabet, Microsoft and Amazon boast market values currently ranging from $2.3 trillion to $3.6 trillion.

“It is true that valuations are high and that there is some froth in the market, however, the spending on AI is real,” said Chris Zaccarelli, chief investment officer for money manager Northlight Asset Management. “Whether or not the spending turns out to be overdone won’t be known for many years.”

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AP Business Writer Stan Choe in New York contributed to this story.