Nvidia unveils fresh AI chip push as Huang targets next trillion-dollar growth wave
Synopsis
Nvidia forecast quarterly revenue above expectations and announced an $80 billion buyback as CEO Jensen Huang highlighted new AI chip products and expanding customer demand to sustain growth.
Nvidia projected stronger-than-expected quarterly revenue and rolled out new plans for next-generation data center chips as CEO Jensen Huang sought to convince investors the AI boom still has years of growth ahead. Despite the upbeat outlook and an $80 billion share buyback announcement, Nvidia shares slipped in after-hours trade as markets weighed intensifying competition across the AI chip industry.
Key highlights
- Nvidia forecast second-quarter revenue of $91 billion, topping analyst estimates
- CEO Jensen Huang said new chip products could help drive sales beyond earlier forecasts
- Company announced an $80 billion share repurchase program
- Investors remain cautious over rising competition from custom AI chips
- Nvidia expects strong growth from AI cloud providers and inference workloads
What Happened
Nvidia forecast second-quarter revenue of $91 billion, plus or minus 2%, comfortably above Wall Street expectations of $86.84 billion, according to LSEG data.
The company also announced an $80 billion share repurchase plan and raised its quarterly dividend to 25 cents per share from 1 cent.
However, shares fell 1.6% in extended trading, suggesting investors remain concerned about whether Nvidia can sustain its extraordinary growth pace as rivals expand their own AI chip offerings.
Nvidia reported first-quarter revenue of $81.62 billion, ahead of analyst expectations of $78.86 billion, while adjusted earnings came in at $1.87 per share versus estimates of $1.76.
Its data center business, the core engine behind the AI boom, generated $75.2 billion in quarterly revenue.
Huang Bets On New AI Customers
Speaking to analysts, Huang said Nvidia expects to grow faster than major cloud computing companies by tapping into a broader customer base beyond traditional hyperscalers.
He pointed to rapidly growing demand from AI-focused cloud firms, saying those customers now contribute revenue levels comparable to the company’s biggest cloud clients.
Huang also highlighted Nvidia’s upcoming “Vera” central processors, describing them as an entry point into a new $200 billion market opportunity.
According to Huang, Nvidia expects roughly $20 billion in revenue from Vera chips by the end of the current fiscal year, separate from the company’s previously projected $1 trillion revenue opportunity tied to its Blackwell and Rubin AI platforms.
Competition Pressure Builds
Despite Nvidia’s dominance in AI infrastructure, competition is intensifying across the semiconductor industry.
Major customers including Alphabet, Amazon and Microsoft are increasingly investing in custom-built AI chips to reduce reliance on Nvidia hardware.
Meanwhile, rivals such as Advanced Micro Devices and Intel are aggressively targeting the growing AI inference market.
Analysts said investors are now looking beyond headline earnings beats and focusing more closely on whether AI spending momentum can remain strong into 2027 and 2028.
Supply Constraints Remain A Risk
Huang acknowledged Nvidia could remain supply constrained throughout the rollout of its Vera Rubin platform later this year.
The company has continued ramping up spending to secure supply chains amid persistent memory chip shortages. Nvidia’s inventory rose to $119 billion during the fiscal first quarter, up from $95.2 billion in the previous quarter.
The company also disclosed $30 billion worth of cloud computing agreements aimed at supporting research and development efforts.
Why It Matters
Nvidia’s earnings are closely watched across global markets because its processors power much of the world’s AI infrastructure.
The company’s latest results reinforce how heavily technology giants continue to spend on artificial intelligence, with industry-wide AI infrastructure investment expected to exceed $700 billion this year.
At the same time, rising competition, supply constraints and investor concerns over the durability of the AI boom are raising the stakes for Nvidia as it attempts to maintain its leadership position in the semiconductor market.
FAQs
Q1: Why did Nvidia shares fall despite strong earnings?
Investors appear concerned about rising competition from rival chipmakers and custom AI chips developed by major technology companies, even though Nvidia exceeded revenue expectations.
Q2: What is Nvidia’s revenue forecast?
Nvidia forecast second-quarter revenue of $91 billion, above Wall Street estimates of $86.84 billion.
Q3: What are Nvidia’s Vera chips?
Vera chips are Nvidia’s new central processors designed for AI data centers and inference workloads. CEO Jensen Huang said they could open access to a new $200 billion market opportunity.
Q4: Why is Nvidia important to the AI market?
Nvidia’s chips power many of the world’s largest AI systems and cloud data centers, making the company a key barometer for global AI demand and infrastructure spending.
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I write about markets, money, and the macro forces that move them. Passionate about turning complex economic trends into sharp, easy-to-understand stories. Off the clock, it’s hip hop, rock, reggae -- and a mix of cricket and basketball.
