Nvidia reported another surge in AI chip sales in its latest quarter, but the results fell just short of sky-high expectations, renewing concerns that the artificial intelligence boom may be cooling.
The Silicon Valley chipmaker — the first publicly traded company to hit a $4 trillion market value — has become a key gauge of the two-year-old AI frenzy that has driven stock markets to record highs. Yet recent reports and cautionary remarks from industry leaders have raised fears the sector’s growth may not be sustainable.
For the May–July quarter, Nvidia’s data center division, which houses its AI processors, generated revenue of $41.1 billion, up 56% from a year earlier but slightly below Wall Street forecasts of $41.3 billion, according to FactSet. Overall revenue jumped 56% to $46.7 billion, while net profit reached $26.4 billion, or $1.08 per share — both topping analyst estimates.
Looking ahead, Nvidia projected revenue of $54 billion for the August–October period, signaling continued confidence in AI demand. CEO Jensen Huang told analysts the world is “at the beginning of the buildout,” predicting $3 trillion to $4 trillion in AI investment by the decade’s end.
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Still, Nvidia’s stock slipped 3% in after-hours trading, a sign investors were underwhelmed given the company’s meteoric rise — more than tenfold in just over two years. Analyst Thomas Monteiro of Investing.com noted the stock “was priced for perfection,” making any letdown hard to avoid.
Adding to the pressure, Nvidia has faced sales restrictions in China after President Donald Trump temporarily banned its AI chip exports, a move estimated to have cost $8 billion last quarter. Earlier this month, Trump lifted the ban in exchange for a 15% cut of Nvidia’s China sales — a deal that could restore $2 billion to $5 billion in revenue, according to CFO Colette Kress.
While AI has been a powerful driver of tech and stock market gains — with the S&P 500 up 69% since late 2022 — some analysts warn of echoes of the late-1990s dot-com bubble, which ended in a painful Silicon Valley crash.
Source: Agency