Nvidia rises after signaling longer AI spending runway

The company reported second-quarter revenue of $96.2 billion, ahead of Wall Street expectations, driven by $89 billion in data center sales.

The stock trades at 17.9 times forward earnings estimates, well below Advanced Micro Devices' AMD.O 37.2 times and Intel's INTC.O 46.2 times.

Aug. 27 (Reuters) - Nvidia shares rose before the bell on Thursday as investors embraced the chipmaker's strong long-term outlook, betting that a global race to build AI infrastructure will fuel years of rapid growth despite concerns about supply bottlenecks and financial ties with customers.

Shares rose 6.7% to $223.71 before the bell, putting Nvidia on track to add about $340 billion to its market value.

The world's most valuable company projected 70% revenue growth next fiscal year and forecast current-quarter sales above Wall Street estimates, signaling that the AI spending boom remains intact.

The upbeat outlook rippled through global semiconductor markets, sending AI-linked stocks higher in Europe and China and offering fresh ammunition to bulls.

Nvidia's shares have fallen nearly 12% from their May peak amid growing investor demands for evidence that the AI spending boom would endure.

Following the results, at least 10 brokerages raised their price target on the shares, according to data compiled by LSEG.

Analysts at Morgan Stanley said, "70% growth supply constrained is a remarkable figure, and to the extent possible we would expect Nvidia to continue to knock down barriers to higher growth."