Nvidia Corp, the dominant maker of artificial intelligence (AI) processors, failed to impress investors with its latest sales forecast, signaling that concerns about an overheated AI economy would continue to dog the company.
Although the chipmaker delivered a first-quarter outlook that easily beat the average Wall Street estimate, Nvidia shares fell as much as 1.5 percent during a conference call with analysts. By Wednesday evening, the stock was little changed.
It was a stark reminder of the skepticism now surrounding Nvidia. After explosive sales growth turned the chipmaker into the world’s most valuable company, investors are seeking stronger assurances that booming AI sales are here to stay.
Photo: AFP
Nvidia chief executive officer Jensen Huang (黃仁勳) pushed back on the concerns during Wednesday’s call, arguing that customers are already making money from their newly acquired computing power.
That is why clients would keep investing at elevated levels, he said.
“You need compute capacity, and that translates directly to growth, and that translates directly to revenues,” Huang said. “I’m confident their cash flows are growing.”
Nvidia chief financial officer Colette Kress tried to defuse other concerns raised by analysts, including the specter of supply constraints.
The company has secured enough components to be able to meet growing demand, she said.
It remains a challenge to produce enough of Nvidia’s most advanced chips, but the company’s current Blackwell lineup — and an upcoming successor, called Rubin — would still beat earlier sales projections, she told analysts.
Nvidia had previously said that the chips would generate US$500 billion by the end of this year.
“We believe we have inventory and supply commitments in place to address future demand, including shipments extending into calendar [year] 2027,” Kress said.
Nvidia still faces uncertainty in China, the largest market for chips. The US government has granted licenses to ship a small amount of H200 processors to customers there, but Nvidia does not know if the Chinese government would give its approval, she said.
For now, the company would continue to exclude data center revenue in China from its forecasts, she added.
Fiscal first-quarter revenue would be about US$78 billion, the Santa Clara, California-based chipmaker said. The average prediction was US$72.8 billion, according to data compiled by Bloomberg.
In the fiscal fourth quarter, which ended on Jan. 25, revenue gained 73 percent to US$68.1 billion. Profit a shares was US$1.62, excluding certain items. Analysts had predicted US$65.9 billion in sales and US$1.53 earnings per share.
Adjusted gross margin was 75.2 percent.
Nvidia’s data center unit had revenue of US$62.3 billion in the quarter. That compared with an average analyst estimate of US$60.4 billion.
Other areas were not as strong. Gaming generated US$3.73 billion in sales. The average estimate was US$4.01 billion. Automotive-related sales were US$604 million, with Wall Street predicting US$643 million.
One cloud is hanging over the technology industry — a shortage of memory chips — and that has held back the gaming division, Kress said.
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