Companies in the AI space are paying more attention to “physical AI,” or artificial intelligence that operates in the real world.

Nvidia reported another record quarter as AI demand continued to surge, with the company saying it has now shifted from a gaming-focused GPU maker to an AI data center giant.

Analysts upgraded their outlooks for Nvidia stock on Thursday after a big earnings report from the AI chip maker.

Nvidia ( NVDA) took its detractors to task during the company's Q3 earnings call on Wednesday, with both CEO Jensen Huang and CFO Colette Kress launching broadsides against investor concerns related to an AI bubble.

The AI hardware giant invested in Redwood Materials, best known for recycling EV batteries, but it's now also tackling data centers' massive energy needs.

Nvidia has soothed worries about AI demand for now, and dispelled fears of a bubble bursting. Investors piled into tech and AI names after its Q3 results.

While Nvidia CEO Jensen Huang calmed the market's AI jitters by posting another blockbuster third quarter, its growing auto business keeps humming along, driven by new deals in the space.

The chip giant on Wednesday produced results and forecasts that beat expectations, allaying immediate fears. But there are longer-term worries that Nvidia's growth could be crimped by factors beyond the control of even the most valuable listed company in human history, now worth more than $4.5 trillion.

Prosecutors have accused Brian Raymond, founder of AI infrastructure and consulting company Bitworks, and three others of selling coveted Nvidia chips to unspecified Chinese companies.

Nvidia Corp. Chief Executive Officer Jensen Huang said his company has enough new Blackwell chips to meet increasing demand and that business is “very, very strong.”

U.S. technology stocks failed to hold on their initial gains on Thursday, as a rally driven by Nvidia ran out of steam with concerns of lofty valuations in the technology space coming back to the fore.