Nvidia Shares Decline Despite Record £60.7 Billion Quarterly Revenue, Analysts Cite Competition
US chip giant Nvidia announced another quarter of record sales and profits, reporting first-quarter revenue up 85% year-on-year to £60.7 billion ($81.6 billion), with net income more than tripling to £46 billion ($58.3 billion). Despite these figures, the company’s shares experienced a 1.6% decline in after-hours trading, reflecting investor adjustments to Nvidia’s consistently strong performance and concerns over emerging competition.
Nvidia, a central provider of chips to major AI developers like OpenAI and Meta, commands a stock market value of approximately £4.2 trillion ($5.3 trillion). The company attributed its latest financial success to robust growth in its data centre division and projects annual spending on AI infrastructure to reach between £2.4 trillion and £3.2 trillion ($3 trillion and $4 trillion) by the decade's end. Chief Executive Jensen Huang noted that “demand has gone parabolic” due to the rise of “agentic AI.”
The company also announced increased returns to shareholders, raising its quarterly dividend to 25 cents per share and initiating a £80 billion share buyback programme. Nvidia forecasts continued revenue growth, expecting to reach £71.8 billion ($91 billion) in the second quarter.
However, analysts suggest the post-earnings share dip is a reflection of “a law of large numbers” and investors seeking continued “hypergrowth.” Furthermore, concerns about growing competition are influencing sentiment, particularly as data centre providers develop their own proprietary chips.
Nvidia’s advanced AI chips remain a focal point in the US-China technology rivalry. While the company was granted conditional approval in January to sell its H200 chips to Chinese customers, it has not yet secured approval from Chinese authorities, who are keen to bolster domestic suppliers. Nvidia’s CEO, Jensen Huang, indicated the company had “largely conceded” the Chinese market to Huawei, with Alvin Nguyen, a senior analyst at Forrester, noting that this demonstrates Nvidia’s capacity for sustained growth outside of China.
