Nvidia delivered another quarter of blockbuster growth, reinforcing its position at the centre of the global artificial intelligence boom, even as investors increasingly question how long the extraordinary momentum can last amid intensifying competition in the AI chip market.
The company reported first-quarter revenue of $81.62 billion, comfortably ahead of analyst estimates of $78.86 billion, while adjusted earnings also topped expectations. Data centre revenue, the key driver of Nvidia’s AI-led growth story, surged to $75.2 billion, highlighting continued aggressive spending by technology companies building AI infrastructure.
According to Reuters, Nvidia also projected second-quarter revenue of about $91 billion, well above Wall Street expectations of $86.84 billion. The upbeat guidance came alongside an announcement of an $80 billion share buyback programme and a sharp increase in its quarterly dividend, signalling confidence in future cash generation.
Despite the strong numbers, Nvidia shares slipped 1.6% in extended trading, suggesting investors remain cautious about the sustainability of AI-driven demand and rising competitive pressures. The stock reaction reflected growing concerns that expectations for Nvidia have become exceptionally high after a prolonged rally that made the company the world’s most valuable listed firm.
Chief Executive Jensen Huang sought to reassure investors by emphasising that Nvidia’s growth is no longer dependent solely on major cloud giants such as Alphabet, Amazon and Microsoft. Huang highlighted the rapid growth of a newer customer segment consisting of AI-focused cloud providers, which he said was expanding faster than traditional hyperscale customers.
The company believes spending on AI infrastructure still has significant room to grow. Large U.S. technology companies are expected to collectively spend more than $700 billion on AI infrastructure this year, compared with roughly $400 billion in 2025, underscoring the scale of investment flowing into the sector.
However, Nvidia’s dominance is increasingly being challenged as many of its largest customers accelerate development of their own custom AI chips. Companies are looking to reduce dependence on Nvidia’s expensive processors, while rivals such as Advanced Micro Devices and Intel continue expanding their presence in AI computing and inference workloads.
To defend its leadership, Nvidia has been broadening its product portfolio beyond graphics processors. Huang said the company’s new “Vera” central processors could open access to a $200 billion market opportunity. Nvidia expects around $20 billion in revenue from Vera chips by the end of the current fiscal year, in addition to previously projected sales from its flagship Blackwell and Rubin AI platforms.
The company also acknowledged ongoing supply constraints tied to soaring global demand for advanced AI chips and memory components. Nvidia indicated that supply limitations could persist through the rollout of its upcoming Vera Rubin platform later this year.
For investors, Nvidia’s results remain a key indicator of the health and durability of the broader AI trade that has powered global technology stocks over the past two years. While the latest earnings once again demonstrated extraordinary demand for AI computing infrastructure, the muted stock response suggests markets are now looking beyond near-term earnings beats and focusing more closely on competitive threats, long-term monetisation and the sustainability of AI spending through the next decade.
