Nvidia posts record $58.3bn quarterly profit amid AI chip boom

Nvidia announced record quarterly profit and revenue on Wednesday, driven by explosive demand for its advanced AI chips.

The U.S. technology giant said net profit surged to $58.3bn for the February-April period, up 37 percent from the previous quarter and more than 200 percent year-over-year.

Revenue climbed to $81.6bn, up 20 percent from the prior quarter and 85 percent compared with the same period last year.

Nvidia forecast revenue of $91bn for the current quarter, surpassing most analysts’ estimates.

The company’s data-center business fueled growth, with quarterly revenue jumping 92 percent year-over-year to $75.2bn.

Hardware unit revenue reached $6.4bn, up 29 percent from the previous year.

In a shareholder-friendly move, the world’s most valuable company announced an additional $80bn share buyback and increased its quarterly cash dividend from $0.01 to $0.25 per share.

CEO Jensen Huang hailed the results as evidence of AI’s growing utility, calling them “extraordinary.”

“Demand has gone parabolic,” Huang said during a conference call with investors and analysts.

“The reason is simple. Agentic AI has arrived,” Huang said, referring to semi-autonomous AI models.

“AI can now do productive and valuable work.”

Despite exceeding expectations, the market response was muted.

Shares fell nearly 1.3 percent in after-hours trading, reflecting the sky-high expectations for a company whose market capitalization has surged past $5 trillion since 2022.

Nvidia’s rapid growth, along with high valuations of Microsoft and Amazon, has sparked debate about whether AI is overhyped and creating a market bubble.

“Expectations are very high, and when a company like Nvidia has been doing as well as it has for so long, it takes a lot for people to get excited,” Jay Goldberg, senior analyst for semiconductors and electronics at Seaport Research, told Al Jazeera.

“That’s just kind of the nature of Wall Street.”

“All these stocks have run a lot this year, but a lot of it is driven by press releases,” Goldberg said, adding that tech firms have yet to demonstrate a “broad-based consumer case” for AI.

William Rhind, CEO and founder of GraniteShares, said the muted reaction showed that expectations had “caught up to fundamentals.”

“Nvidia is no longer beating a high bar – it is the bar,” Rhind told Al Jazeera.

Rhind said the bullish case for Nvidia remains strong, pointing to the dividend hike and buyback as signs of a company with “more cash than it can possibly redeploy into the business.”

“When the marginal use of capital starts shifting toward buybacks and dividends, you’re watching a hypergrowth story begin to mature in real time,” he said.

“That’s not bearish – it’s a different kind of bullish.”

John Belton, a portfolio manager at Gabelli Funds, said Nvidia’s latest results should not “dramatically shift the story one way or the other.”

“Overall, another solid earnings,” Belton told Al Jazeera, adding that the results mirrored “strong numbers” from previous quarters “albeit without any new earth-shattering developments.”