Chipmaker Nvidia has posted another record quarter, with sales and profits beating expectations. Despite the strong numbers, Nvidia’s shares fell 1.6% in after-hours trading.
Nvidia is a key supplier of AI chips for major companies, including OpenAI and Meta. Investors closely watch its results because they reflect the health of the AI market.
The company reported first quarter revenue of $81.6 billion, an 85% increase from last year. Net income more than tripled, reaching $58.3 billion.
Analysts say investors are starting to worry about rising competition.
Nvidia is now the world’s most valuable company, with a market value of around $5.3 trillion, also it represents 8% of the S&P 500. Its data center division, which powers AI tools for companies like Meta, drove much of the sales growth.
The company predicts AI infrastructure spending could reach $3–$4 trillion per year by 2030. CEO Jensen Huang said demand is “parabolic,” noting the rise of advanced AI systems, sometimes called agentic AI.
Experts say the slight drop in Nvidia’s shares is due to the “law of large numbers.”
Without belief in continued hypergrowth, investors may sell shares even after strong results.
Victoria Scholar, head of investment at Interactive Investor, added that investors had already bought Nvidia stock in anticipation of these results.
She also noted concerns about growing competition as cloud giants, or hyperscale's, start developing their own AI chips.
Meta is a major customer of Nvidia, using its chips to train AI models. As AI becomes more advanced, companies like Meta will rely on Nvidia’s hardware for faster and more efficient AI development.
However, the rise of competitors making their own chips could change the market dynamics.
