Nvidia CEO Jensen Huang after a welcome ceremony for U.S. President Donald Trump in Beijing on May 14.BRENDAN SMIALOWSKI/AFP/Getty Images
Nvidia NVDA-Q forecast second-quarter revenue above Wall Street expectations on Wednesday and announced an US$80-billion share repurchase program.
Shares of the company were up 1.3 per cent in extended trading.
The world’s most valuable company expects revenue of US$91-billion, plus or minus 2 per cent, compared with estimates of US$86.84-billion, according to data compiled by LSEG.
Nvidia’s results are largely considered a barometer for the AI market’s health, as its chips are used in virtually every major data centre in the world, powering the largest and most advanced AI models.
“Nvidia delivered another beat, but at this point that’s essentially priced in as it keeps beating quarter after quarter,” said eMarketer analyst Jacob Bourne. “The lingering question is whether it can convince investors the AI buildout has durability into 2027 and 2028, especially as the narrative shifts toward inference workloads and competing silicon from Google, Amazon, AMD and Intel.”
The company also said it would increase its quarterly cash dividend to 25 cents per share from one cent. Spending on AI infrastructure continues to grow rapidly, with U.S. tech giants, Alphabet GOOGL-Q, Amazon AMZN-Q and Microsoft MSFT-Q, expected to spend more than US$700-billion on AI this year, a sharp jump from around US$400-billion in 2025.
While heavily relying on Nvidia’s expensive processors, the companies are also pouring funds into developing their own custom chips to run models, posing a risk to Nvidia’s long-held dominance over the chip industry.
Those chips are targeted at inferencing – the process by which AI responds to user queries – which represents a much larger market than training. Nvidia is facing competition not only from Big Tech but also from other chip rivals, including Intel INTC-Q and Advanced Micro Devices AMD-Q, which have touted a large revenue opportunity from the inference market.
The Santa Clara, Calif.-based company has made moves to defend its position. It unveiled a new central processor and AI system built on technology from Groq – a chip startup specializing in inference – in March.
The company is also spending heavily to ensure it does not hit supply-chain snags during a global memory chip crunch. Nvidia said on Wednesday that its supply rose to US$119-billion in the fiscal first quarter, up from US$95.2-billion the previous quarter.
Nvidia reported first-quarter revenue of US$81.62-billion, beating analysts’ average estimate of US$78.86-billion, according to data compiled by LSEG.
Data centre revenue in the quarter came in at US$75.2-billion, compared with the average analyst estimate of US$72.8-billion.
On an adjusted basis, the firm earned US$1.87 per share, compared with market estimates of US$1.76.
Nvidia also disclosed US$30-billion worth of cloud computing agreements, up sequentially from US$27-billion, which it said were to help its research and development efforts. Seaport analyst Jay Goldberg said in a research note last year that such a commitment likely represents “backstops” in which Nvidia agrees to pay cloud computing companies that buy its hardware for excess capacity from those companies running Nvidia systems.