Nvidia CEO Jensen Huang said Wednesday markets have miscalculated the AI threat to software companies in an interview hours after the chip behemoth issued an upbeat sales forecast on strong AI demand.

“I think the markets got it wrong,” Huang said. “Nobody’s going to service better than ServiceNow, and they’re going to come up with agents that are really fine-tuned and optimized for the work that uses the tools that they have.”

“In the end, we need the tools to finish their work and put the information back in a way that we can understand,” he told CNBC’s Becky Quick.

Nvidia’s revenue for the fiscal fourth quarter climbed 73% to $68.13 billion from a year earlier, beating analysts’ estimates for $66.21 billion.

The company issued an upbeat guidance with revenue for the fiscal first quarter to be $78 billion, plus or minus 2%, well above analysts’ forecast for $72.6 billion.

Investors had grown weary that the massive run-up in spending on AI hardware might not be sustainable, stoking fears of a bubble building in the sector.

Shares of software service providers have taken a beating in recent weeks. While analysts have sounded the alarm that AI will “eat” software over the long term, views on that risk and the fundamentals behind the latest sell-off appeared divided.

“People need to remember that all everything — whether it’s the railroads, canals, the internet, all of these things tend to get overbuilt — and then we figure out who the winners and losers are going to be,” Dan Niles, founder and portfolio manager of Niles Investment Management, told CNBC.

Nvidia shares rose as much as 2% in extended trading after the quarterly earnings report.

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