Nvidia CEO Jensen Huang on Wednesday aimed to assure investors that the company can sustain its blockbuster growth. New products will help surpass the $1 trillion sales forecast for its flagship AI chips.
Shares fell 1.6% in extended trading, however, signaling investors anticipate tougher competition even though the company forecast second-quarter revenue above Wall Street estimates and announced an $80 billion share repurchase program.
Nvidia expects revenue of $91 billion, plus or minus 2%, compared with estimates of $86.84 billion, according to LSEG data.
The company's results are widely seen as a barometer for the AI market's health, as its chips power nearly every major data center globally.
"Nvidia delivered another beat, but that's essentially priced in," said eMarketer analyst Jacob Bourne. "The lingering question is whether it can convince investors the AI buildout has durability into 2027 and 2028."
The company also said it would increase its quarterly cash dividend to 25 cents per share from 1 cent.
Spending on AI infrastructure continues to grow rapidly. U.S. tech giants are expected to spend over $700 billion on AI this year, up from around $400 billion in 2025.
Huang told analysts that Nvidia will grow faster than those "hyperscale" customers, pointing to a new sub-segment of customers in its data center business that includes AI-specific cloud firms.
RISING COMPETITION FROM CUSTOM CHIPS
Many of Nvidia's biggest customers are pouring funds into developing their own custom chips, posing a risk to Nvidia's long-held dominance.
Nvidia faces competition not only from Big Tech but also from Intel and Advanced Micro Devices.
Nvidia has made moves to defend its position. In March, it unveiled a new central processor and AI system built on technology from Groq.
VERA CHIP TARGETS NEW MARKET
Huang said Nvidia's new "Vera" central processors give it access to a new $200 billion market. Nvidia expects $20 billion in revenue from Vera chip sales by the end of this fiscal year.
"I expect [Vera] to be the second largest sales contributor," Huang said. "All of our customers are quite excited about Vera."
But Huang conceded that "we'll be supply-constrained through the entire life of Vera Rubin."
Nvidia is spending heavily to avoid supply-chain snags. The company said supply rose to $119 billion in the fiscal first quarter, up from $95.2 billion the previous quarter.
Nvidia reported first-quarter revenue of $81.62 billion, beating analysts' average estimate of $78.86 billion.
Data center revenue came in at $75.2 billion, compared with the average analyst estimate of $72.8 billion.
On an adjusted basis, the firm earned $1.87 per share, compared with market estimates of $1.76.
Nvidia also disclosed $30 billion worth of cloud computing agreements, up from $27 billion sequentially.
