US chip giant Nvidia has issued a modest revenue forecast for the current quarter, sparking investor concern about a potential slowdown in the rapid growth of spending on artificial intelligence (AI).
The company expects revenue for the quarter ending in October to reach approximately $54 billion, it announced on Wednesday. While this aligns with Wall Street’s average expectations, some analysts—citing Bloomberg—had predicted figures exceeding $60 billion. Following the announcement, Nvidia’s shares fell sharply during after-hours trading in New York.
Notably, the revenue forecast excludes sales of data centre equipment in China, a market where Nvidia faces challenges due to US export restrictions and regulatory measures from Beijing. Although the Trump administration recently eased restrictions on the export of certain AI chips to China, this has yet to result in a noticeable recovery in Chinese sales.
Chinese chipmakers have also been striving to reduce their reliance on Nvidia’s chips, increasing uncertainty over how much market share Nvidia could potentially regain in the region.
Despite these challenges, Nvidia continues to experience remarkable growth. The company recorded revenue of $46.7 billion in the last quarter, a 56% increase compared to the corresponding period last year. Net profit surged by 59% to $26.4 billion. Nvidia also announced plans to repurchase $60 billion worth of its own shares.
Ahead of Nvidia’s earnings report, the S&P 500 index hit a record high on Wednesday, closing at 6,481.40 points.
Nvidia, the world’s most valuable company, now accounts for approximately 8% of the S&P 500.
