WHAT NVIDIA’S EARNINGS MEAN FOR AI MARKETS

Nvidia's Q3 results nailed their landing last night. And, whilst a very long way from award-winning AI in Ireland, the relief was immediately palpable.

“There has been a lot of talk about an AI bubble," CEO Jensen Huang said on the earnings call. "From our vantage point we see something very different.”

With revenue at $57 billion - beating what might have been optimistic expectations of around $55 billion - the first hot takes suggested this was enough to keep AI valuations afloat.

But for how long?

Whilst hyperscalers like Google and Microsoft have the cash to fund the bets they're making, others are building new data centres fuelled by debt. And the bears have noted they're having to hope the economic life of their servers are longer than many expect.

Stretching meaningful returns by a couple of years slows depreciation - and makes any capex programme look more comfortable. If it's real. But will the servers still be good earners five years after install?

Because if an adjustment to valuations does come - if there is a bubble to be burst - the impacts won't stay contained. They'll move through index funds into pension valuations, interest rates, GDP growth and tax receipts.

Hence the palpable relief many in Ireland felt last night.