Nvidia posts record earnings but signals softer AI outlook

Chipmaker Nvidia, the world’s most valuable publicly traded company, this week reported another quarter of record sales, though its outlook fell short of the market’s most bullish expectations, sending shares lower on concerns that the artificial intelligence (AI) boom may be losing momentum.

The Santa Clara-based company said revenue in its fiscal third quarter through October will be about $54 billion, roughly in line with the average Wall Street estimate but well below the more optimistic forecasts that had topped $60 billion. Nvidia’s fiscal year ends in late January.

The guidance excludes data center revenue from China, still constrained by US export curbs and Beijing’s drive to reduce reliance on American technology.

Nvidia initially designed the H20 chip—used in large language models and real-time AI applications in cloud services—for China while adhering to earlier export norms that allowed legal shipments.

Since April, however, the US has tightened restrictions, halting all H20 sales and requiring licenses for further exports. Even after Washington eased some of those curbs, sales in China have yet to recover.

The muted forecast underscored investor unease that the surge in AI spending may not be sustainable.

Quarterly earnings nonetheless jumped 56% from a year earlier to $46.7 billion, rising 6% from the previous quarter.

The core of Nvidia’s growth remains its data center division, powered by the new Blackwell architecture. That segment generated $41.1 billion in sales, up 56% from a year ago and 5% from the prior quarter, underscoring strong enterprise and cloud demand worldwide.

Nvidia has returned $24.3 billion to shareholders so far this year through buybacks and dividends, while the board authorized an additional $60 billion for repurchases, signaling confidence in future growth. The company said it will pay its next quarterly dividend on 2 October.

Operating margins are also expected to stay above 73%, setting the stage for another year of record results.

Despite the strong performance, Nvidia shares fell about 4% in late trading after the announcement. The stock had gained 35% this year, pushing the company’s market value past $4 trillion and cementing its position as the world’s most valuable listed firm.

Founded three decades ago and once known mainly for graphics processors for video games, Nvidia has become the dominant supplier of chips that train and run AI systems.

Its revenue has soared, with projections topping $300 billion by 2028.

Yet the company’s reliance on a handful of hyperscale customers—including Microsoft, Amazon, and other major cloud operators that account for about half of sales—remains a vulnerability.

Nvidia also faces supply pressures. The company depends on Taiwan Semiconductor Manufacturing Co. (TSMC) for its most advanced chips, and capacity expansion has lagged the pace at which customers are building data centers.