Nvidia’s high-end GPUs remain in hot demand from tech giants building data centres for artificial intelligence applications. However, investors are questioning whether the massive AI investments are sustainable.
“The data centre results, while massive, showed hints that hyperscaler spending could tighten at the margins if near-term returns from AI applications remain difficult to quantify,” said Emarketer analyst Jacob Bourne.
“At the same time, US export restrictions are fuelling domestic chipmaking in China.”
Nvidia shares fell slightly more than 3% in after-market trading.
The earnings report comes amid market worries about an AI spending bubble that could burst and hurt the chip giant’s fortunes.
Nvidia serves as a bellwether for the AI market and became the first company to reach US$4t in market value last July.
Earlier this month, President Donald Trump confirmed that Nvidia would pay the United States 15% of its revenues from sales of certain AI chips to China.
Speaking to reporters at the White House, Trump called Nvidia’s H20 chips “obsolete”, despite their previous targeting under export restrictions.
Beijing has responded by expressing national security concerns about Nvidia chips and urging Chinese businesses to rely on local semiconductor suppliers instead.
Nvidia developed the H20 – a less powerful version of its AI processing units – specifically for export to China to address US concerns that its top-tier chips could be used for weapons development or AI applications in the rival nation.
– Agence France-Presse
