Nvidia's record result fails to impress investors

Nvidia, a key provider of AI infrastructure chips, reported record first-quarter results with revenue up 85% year-over-year to $81.6 billion and net income more than tripling to $58.3 billion. Despite these strong figures, the company's shares declined in after-hours trading. Analysts suggest investors have become accustomed to Nvidia's exceptional performance and are concerned about increasing competition. Nvidia, currently the world's most valuable company, attributes its sales growth to its data center division and anticipates significant future spending on AI infrastructure. CEO Jensen Huang stated that demand is growing rapidly due to the emergence of "agentic AI."

Nvidia announced record quarterly profit and revenue for the February-April period, driven by high demand for its AI chips. Profit soared to $58.3 billion, a 37% increase from the previous quarter and over 200% year-on-year, while revenue reached $81.6 billion, up 20% from the prior quarter. The company's data-center business was the primary growth engine, generating $75.2 billion in quarterly revenue. Nvidia also announced an $80 billion stock buyback program and increased its quarterly cash dividend to $0.25 per share. CEO Jensen Huang attributed the "extraordinary" results to the arrival of agentic AI, which can now perform productive work. Despite exceeding analyst expectations, Nvidia's stock saw a slight decline in after-hours trading due to extremely high market expectations.

Nvidia reported first-quarter revenue of $81.62 billion, significantly exceeding Wall Street expectations and demonstrating continued strong growth driven by the AI boom. The company's datacenter business, a major revenue driver, saw 92% year-over-year growth. CEO Jensen Huang stated that the buildout of "AI factories" is accelerating rapidly, with agentic AI scaling across industries. Analysts view Nvidia's performance as a referendum on the broader AI infrastructure expansion, with US tech giants planning substantial investments. Nvidia is also exploring expansion into China and has announced a new AI system, Vera Rubin, expected in late 2026, which Huang anticipates will face supply constraints.

Chinese AI chip designers Cambricon Technologies and MetaX Integrated Circuits reported significant revenue growth in the first quarter of 2024. Cambricon's revenue surged 160% to 2.89 billion yuan, with profit increasing 185% to 1 billion yuan, driven by high demand for AI computing power. MetaX saw its revenue grow 75% to 561.9 million yuan, attributed to increased GPU shipments. This surge in domestic chip demand is fueled by China's push for self-sufficiency and lingering US export control risks, which have tightened the availability of foreign GPUs. Both companies are key players in China's efforts to develop its own advanced semiconductor capabilities.