US semiconductor leader Nvidia announced another record-breaking quarter, surpassing sales and profit expectations, indicating continued momentum in the artificial intelligence (AI) sector.
As a key supplier of AI infrastructure chips to major developers such as OpenAI and Meta, Nvidia's financial performance is closely monitored.
The company reported first-quarter revenue increased 85% year-over-year to $81.6bn (£60.7bn), with net income more than tripling to $58.3bn.
Despite these strong results, Nvidia's shares declined 1.6% in after-hours trading. Analysts noted that investors have grown accustomed to Nvidia's exceptional performance and expressed concerns about rising competition.
Nvidia remains the world's most valuable company, with a market capitalization near $5.3 trillion.
The recent revenue growth was primarily driven by robust expansion in its data centre segment.
The company projects annual AI infrastructure spending to reach between $3 trillion and $4 trillion by the end of this decade.
"Demand has gone parabolic," said chief executive Jensen Huang during a conference call with analysts. "The reason is simple: the era of agentic AI is here."
Nvidia also announced increased shareholder returns, raising its quarterly dividend from one cent per share to 25 cents and unveiling an £80bn share buyback program.
The company forecasts continued revenue growth, expecting $91bn in the second quarter.
'The bar is very high'
Despite the strong financial results, Nvidia's shares fell in extended trading. Ruth Foxe-Blader, managing partner at US venture capital firm Citrine Venture Partners, attributed this to "a law of large numbers."
"Nvidia represents 8% of the S&P 500. Unless there's a belief in this continued parabolic growth it's difficult for investors to get super excited, although Nvidia posted outstanding numbers," she told the BBC.
"But it's just investors seeking that hypergrowth, which is indicating an early sell-off."
Victoria Scholar, head of investment at interactive investor, concurred that while the quarter was strong,
"the bar is very high for the artificial intelligence bellwether which has made a habit out of delivering incredibly impressive results.
Plus investors 'bought the rumour, sold the fact' as shares had already rallied ahead of earnings," she added.
She also highlighted investor concerns regarding increasing competition as the data centre landscape evolves and hyperscale companies develop their own chips.
'Largely conceded' China
Nvidia's AI chips have been central to the technological competition between the US and China.
In January, the Trump administration permitted Nvidia to sell its H200 chips to Chinese customers under specific conditions.
The H200, Nvidia's second most advanced semiconductor, had previously been restricted by US authorities due to concerns it could enhance China's technological and military capabilities.
However, Nvidia has yet to receive approval from Chinese regulators to sell these chips, as China aims to support its domestic suppliers.
Last week, Jensen Huang was a last-minute addition to a group of top US CEOs accompanying President Donald Trump on an official visit to Beijing, though it remains unclear whether semiconductor issues were discussed or to what extent.
In its recent earnings report, Nvidia stated it is not anticipating any revenue from data centre chip sales to China in the current quarter. Huang told CNBC he had
"largely conceded" the market to Chinese tech giant Huawei.
Alvin Nguyen, senior analyst at Forrester, commented that Nvidia could still thrive without the Chinese market.
"By effectively excluding China and conceding that market to Huawei, Nvidia is demonstrating that global AI demand outside China is more than enough to sustain its growth."
