Nvidia reported its fiscal first quarter results after the bell on Wednesday, beating analysts’ expectations on the top and bottom lines and offering a better-than-expected Q2 outlook.
The top AI chips maker on Wednesday forecast second-quarter revenue that beat Wall Street expectations and announced an $80 billion share repurchase program.
Nvidia stock initially fell more than 2% on the news.
The company’s shares fell 0.2% in extended trading, but the world’s most valuable company now expects revenue of $91 billion, plus or minus 2%, compared with estimates of $86.84 billion, according to data compiled by LSEG.
Nvidia’s results are largely considered a barometer for the health of the AI market, as its chips are used in nearly every major data center in the world, powering the largest and most advanced AI models.
“Nvidia has taken another hit, but this time it’s essentially priced in as it continues to beat the odds quarter after quarter,” said eMarketer analyst Jacob Bourne. “The lingering question is whether it can reassure investors that the AI buildout has sustainability through 2027 and 2028, particularly as the narrative turns toward projected workloads and competitive silicon from Google, Amazon, AMD, and Intel.”
The company also said it would increase its quarterly cash dividend by 1 cent to 25 cents a share.
Spending on AI infrastructure is growing rapidly, with US tech giants including Alphabet, Amazon and Microsoft expected to spend more than $700 billion on AI this year, a sharp jump from about $400 billion in 2025.
A line chart showing NVIDIA’s price during and after market hours
Increasing competition from customer chips:
Relying heavily on Nvidia’s expensive processors, companies are also pouring money into developing their own custom chips to run the models, posing a threat to Nvidia’s long-standing dominance of the chip industry.
Those chips are targeted at inference – the process by which AI responds to user questions – which represents a much larger market than training.
Nvidia faces competition not only from Big Tech but also from other chip rivals including Intel and Advanced Micro Devices, which have claimed a huge revenue opportunity from the spec market.
The company took steps to protect the situation:
The Santa Clara, California-based company has taken steps to protect its position. It unveiled a new central processor and AI system in March built on technology from Grok — a chip startup that specializes in guessing.
In the company’s quarterly results call with financial analysts, Colette Cress, Nvidia’s finance chief, said Nvidia’s central processor, or CPU, market is about $200 billion and the company has “visibility to about $20 billion in total CPU revenue” this fiscal year.
The company is also spending heavily to ensure that there are no supply-chain disruptions during the global memory chip crisis. Nvidia said on Wednesday its supply rose to $119 billion in the fiscal first quarter, from $95.2 billion in the previous quarter.
Nvidia reported first-quarter revenue of $81.62 billion, beating analysts’ average estimate of $78.86 billion, according to data compiled by LSEG.
Data center revenue in the quarter came in at $75.2 billion, compared to analysts’ average estimate of $72.8 billion.
On an adjusted basis, the firm earned $1.87 per share, compared with the market estimate of $1.76.
Nvidia also disclosed cloud computing agreements worth $30 billion, up from $27 billion sequentially, which it said will help its research and development efforts. Seaport analyst Jay Goldberg said in a research note last year that such a commitment would likely represent a “backstop” in which Nvidia agrees to pay cloud computing companies that buy their hardware for additional capacity from companies that run Nvidia systems.
