Nvidia’s stock price fell by more than four percent in morning trading on Thursday, despite the AI chip giant delivering financial results that exceeded Wall Street expectations. Some experts blame AI bubble fears and the massive spending AI companies engage in to stay in front of the curve.
CNBC reports that Nvidia reported fiscal fourth-quarter revenue of $68.13 billion, surpassing analyst predictions of $66.21 billion according to LSEG data. This figure represents a massive 73 percent increase compared to the company’s revenue from the same period one year earlier. The company also provided forward guidance that exceeded market expectations.
Despite beating the street, Nvidia shares have fallen by more than four perfect today, reflecting growing investor anxiety about the long-term sustainability of AI infrastructure investments. Richard Clode, portfolio manager at Janus Henderson Investors, explained the shift in market sentiment in an email to CNBC. “The debate has shifted away from near-term results and toward the sustainability of AI capex spending, amid concerns around its quantum, monetization and potential cashflow degradation,” Clode stated.
The muted market reaction comes despite Nvidia’s continued dominance in the AI chip sector. The company’s data center division, which contains its industry-leading processors, generated 91 percent of total sales during the quarter. Data center revenue reached $62.3 billion, exceeding the StreetAccount consensus estimate of $60.69 billion.
Looking ahead, Nvidia issued optimistic guidance for the upcoming fiscal first quarter, projecting revenue of $78 billion. This forecast significantly surpasses analyst expectations of $72.6 billion. Clode noted the significance of this projection, saying “The guidance of $78bn in revenues was well ahead of even the most bullish buyside expectations and the fourth straight quarter of accelerating growth in contrast to concerns around a slowdown.”
The semiconductor industry has faced heightened scrutiny in recent months as investors question whether massive capital expenditures on AI infrastructure will generate sufficient returns. Major technology companies, often referred to as hyperscalers, experienced dramatic market value fluctuations at the beginning of February. More than $1 trillion in combined market capitalization was erased from these companies, though they have since recovered portions of those losses.
Despite these broader market concerns, Nvidia’s financial performance demonstrates continued robust demand for its products. The company has maintained its position as the primary supplier of advanced chips used in AI applications, particularly for training and running large language models and other machine learning systems.
Breitbart News previously reported that Nvidia CEO Jensen Huang continues to push for access to the Chinese market with plans to sell AI chips to the Communist nation. Huang sees this as a major focus for the company’s future growth:
Nvidia has not received any orders from Chinese customers for its H200 AI chips as Beijing continues to deliberate on whether to permit imports of the American company’s AI components, according to CEO Jensen Huang.
Speaking to reporters in Taipei, Huang expressed his hopes for government approval. “I’m hoping that the Chinese government would allow Nvidia to sell the H200,” Huang stated. “It’s up to the Chinese government now but they are still deciding, and we are waiting patiently.”
During his recent trip to China over the past few days, Huang revealed that he met with both customers and government officials. However, despite these meetings, no new orders for the H200 chips were placed during his visit.
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
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