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Nvidia's revenue more than doubled in the latest quarter, continuing a streak of blistering growth, but its shares fell as the US chipmaker failed to meet the lofty expectations expected of what has become one of Wall Street's most closely watched companies.
The Silicon Valley company has tried to reassure investors that it will make “several billion dollars” in revenue this fiscal year from the next generation of its powerful artificial intelligence chips, despite production problemsHowever, Nvidia's forecasts for the current quarter fell short of analysts' most ambitious predictions.
Revenue for the three months ending July 28 was $30 billion, up 122% from a year earlier. Analysts had expected $28.7 billion. Nvidia expects $32.5 billion in revenue for the current quarter, plus or minus 2%, just slightly ahead of analysts' consensus expectations. It also authorized another $50 billion in share buybacks.
Some investors had expected an even higher earnings forecast ahead of Wednesday's report. Its shares fell as much as 8 percent in after-hours trading after the call with investors, potentially wiping more than $200 billion from its market capitalization.
Investors were eagerly awaiting Nvidia's latest data as a sign of how AI The boom that has engulfed the technology sector continued.
Nvidia has become a huge force in U.S. stock markets after a meteoric rise has sent its shares up about 160 percent since the start of the year, giving it a market capitalization of $3 trillion. Its gains have accounted for more than a quarter of the S&P 500's annual gains.
Asked if he felt the weight of those expectations, Nvidia CEO Jensen Huang told the Financial Times: “No, until you brought it up just a second ago. We can only do our job. We can only do what we can do.”
He added: “Everyone is racing towards the future… It is our responsibility to help the world achieve it.”
While the year-over-year growth was another record quarter for Nvidia, the pace was far below the 262 percent jump in revenue it reported in the previous quarter. Earnings per share were 68 cents, versus the 65 cents expected, and net income was $16.6 billion. Gross margin was 75.1 percent, versus analysts’ expectations of 75.5 percent.
Earlier this month, detain to the next generation of chips, known as Blackwell, has become a potential obstacle to Nvidia's breakneck growth. Huang previously said Blackwell would bring in “a lot” of revenue this year.
Chief Financial Officer Colette Kress commented on the delays on Wednesday, saying Nvidia, which partners with Taiwan Semiconductor Manufacturing Company to make its chips, made changes to its Blackwell manufacturing technology to improve productivity.
She added: “Blackwell's production cycle is planned to begin in the fourth quarter and continue into fiscal 2026. In the fourth quarter, we expect Blackwell to generate several billion dollars in revenue.”
Huang added that demand for current-generation Hopper chips “remains strong.”
In a call with investors, Huang did not disclose details of Blackwell's delay, but said that changes to the project were complete and “there are no need for any functional changes.”
The latest quarterly results from Google, Microsoft, Meta and Amazon showed the extent of Big Tech’s spending on building the infrastructure to train and run AI models. They are also among Nvidia’s biggest customers, and the earnings report was expected to offer a temperature check on broader sentiment around AI.
As for the massive spending on AI infrastructure, “we see momentum accelerating in generative AI,” Huang said. The company expects its data center revenue, which reached $26.3 billion last quarter, to grow “pretty significantly” next year.
Daniel Newman, CEO of Futurum Group, described the quarter as “solid, but any result below the upper end of estimates is likely to be met with some confusion.”
“I think we are seeing a peak in expectations and a lot of people believe in [Nvidia] that it doesn't really have any advantage, short of a silly management or a surprise announcement,” he said. “The demand for the hopper should allow the company to safely outpace it [guidance]which was ahead of the consensus, but still conservative in my opinion.”