Nvidia delivered a surprisingly strong revenue forecast and pushed back on the idea that the artificial intelligence industry is in a bubble, easing concerns that had spread across the tech sector.

Sales will be about $65 billion in the January quarter, the chipmaker said in a statement on Wednesday. Analysts had estimated $62 billion on average, according to data compiled by Bloomberg.

The outlook signals that demand remains robust for Nvidia¡¯s artificial intelligence accelerators, the pricey and powerful chips used to develop AI models. Nvidia has faced growing fears that the runaway spending on such equipment isn¡¯t sustainable.

¡°There¡¯s been a lot of talk about an AI bubble,¡± CEO Jensen Huang said on a conference call with analysts. ¡°From our vantage point, we see something very different.¡±

Nvidia shares gained about 4% in late trading after the report was released. They had been up 39% this year through the close.

Nvidia results have become a barometer for the health of the AI industry, and the news lifted a variety of related stocks. CoreWeave, a provider of AI computing, gained more than 10% in extended trading. Its peer Nebius Group climbed more than 8%.

¡°Markets are reacting very positively to the news that there is no slack in AI momentum,¡± Brian Mulberry, senior client portfolio manager at Zacks Investment Management, said in a note. His firm owns Nvidia shares. ¡°Demand for Nvidia hardware solutions remains strong,¡± he said.

In explaining AI¡¯s unabated growth, Huang paraphrased a recent movie title, saying that ¡°AI is going everywhere, doing everything, all at once.¡±

The CEO had said last month that the company has more than $500 billion of revenue coming over the next few quarters. Owners of large data centers will continue to spend on new gear because investments in AI have begun to pay off, he said.

On Wednesday, Chief Financial Officer Colette Kress said there was an opportunity to go beyond that $500 billion target.

In the fiscal third quarter, revenue rose 62% to $57 billion. Profit was $1.30 a share. Analysts had predicted sales of $55.2 billion and earnings of $1.26 a share for the period, which ended Oct. 26.

Nvidia¡¯s main data center unit had revenue of $51.2 billion in the quarter, compared with an average estimate of $49.3 billion. Chips used in gaming PCs ¡ª once the company¡¯s chief source of revenue ¡ª delivered sales of $4.3 billion. That compares with an average estimate of $4.4 billion.

The forecast for the latest quarter reflects a staggering run for the company. Sales will be up about 10-fold from where they were in the same period just three years ago. And Nvidia is on course to deliver more...