What's going on?

AI super heavyweight Nvidia reported the most anticipated set of results of the year on Wednesday � and they were seriously envy-inducing.

What does this mean?

In the investing world, there seem to be two camps these days: those holding Nvidia shares and those wishing they were. Just a few months back, Nvidia left jaws on the floor, predicting a whopping $11 billion in second-quarter revenue � a cool 50% more than what the pundits had expected. And now the firm�s gone and delivered again: the tech giant not only reported a stellar $13.5 billion, but it also projected $16 billion in revenue for the current quarter. That�s a staggering 170% jump from last year, surpassing even the wildest dreams of Nvidia enthusiasts. The burning question now is whether there�s any ceiling to this success.

Why should I care?

For markets: Back-up engine.
There�s one riddle everyone�s trying to solve � and that�s whether AI, with Nvidia at the helm, is strong enough to fuel stocks� ascent even if the broader economy runs out of steam. Consider this: corporate profit made up around 16% of the US economy last year, and that�s been above 17% in the past. So hypothetically, even if the consumer-driven US economy hits a bump, AI-enhanced company profit could still surge, taking a bigger slice of the overall economic pie.

The bigger picture: Here comes the cold water.
During the post-Covid tech boom, buyers struggled to get their hands on the semiconductors they needed � and that led them to over-order, which caused a chip glut when the tide eventually turned. And while AI chips are a different beast, Nvidia is also struggling to meet the current insatiable demand. So it�s plausible that some customers, desperate for Nvidia�s coveted chips, might be inflating their orders too. But here�s the catch: if � just if � this demand starts to wane, Nvidia could find itself nursing an all-too-familiar supply hangover.