Signalling a slowdown after an unprecedented AI boom, Nvidia’s revenue forecast falls below the loftiest Wall Street expectations.
Nvidia projected a slowdown in revenue growth after a two-year boom fuelled by artificial intelligence spending. The chipmaker forecast sales of about $54 billion for the fiscal third quarter ending in October, in line with Wall Street’s average estimate but below some analysts’ expectations of more than $60 billion.
The weaker outlook raised concerns over the sustainability of massive investment in AI infrastructure. Nvidia’s business has also been clouded by geopolitical uncertainty in China. Although the Trump administration recently eased restrictions on AI chip exports to the country, the move has yet to revive revenue.
Shares of Nvidia fell roughly 3% in after-hours trading following the announcement, though the stock remains up 35% this year, giving the company a market capitalisation above $4 trillion. The company also authorised an additional $60 billion in stock buybacks, adding to $14.7 billion left under its existing programme.
For the fiscal second quarter, which ended 27 July, revenue climbed 56% to $46.7 billion, slightly above estimates of $46.2 billion. It was Nvidia’s smallest percentage gain in more than two years. Profit stood at $1.05 a share, excluding certain items, compared with expectations of $1.01.
Data centre sales, now Nvidia’s largest division, generated $41.1 billion, just shy of analyst forecasts of $41.3 billion. Gaming revenue totalled $4.29 billion, surpassing estimates, while automotive sales reached $586 million, marginally below projections.
The results signalled that demand from hyperscale data centre operators may be tightening as returns from AI applications remain uncertain. Analysts also pointed to continued risks from US-China trade tensions, which have already erased billions in potential sales of Nvidia’s advanced chips.
