Nvidia Shares Fall as AI Chip Giant Fails to Meet Investor Expectations

Nvidia Corporation shares fell 6% after-hours in New York despite hitting revenue records and doubling its sales. According to the BBC, the AI chipmaker announced record revenues of $30bn, surpassing the expected revenues of $28.7bn and increasing sales by 122% compared to the previous year.

However, according to the data shared, that impressive growth is starting to slow down. “If you’re going to raise expectations that high then you’ve got to keep growing at spectacular rates,” said Simon French, head of research at Panmure Liberum, to the BBC.

Nvidia had been building high expectations in the past few months. They announced a new affordable generation of AI chips in March, called Blackwell, and in July it was revealed that the company has been working on a new flagship model for the Chinese market. However, investors were expecting more groundbreaking results during this last quarterly results.

“Markets expect them to be shattered, and it’s the scale of the beat today that looks to have disappointed a touch,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown, to the BBC.

According to Mr. French, the new generation of AI chips ”has faced some production delays, and that perhaps is one of the reasons why Wall Street after hours sold off the stock.”

Nvidia shared samples of the new Blackwell chip and has been working on it to make it more efficient during this past quarter. According to CNBC, the company expects to sell it soon and make several billion dollars in the fourth quarter this year.

Nvidia keeps successfully selling its Hopper AI Chips, an older generation, and producing products for the gaming market—the company’s former main target. Now that the company has gained popularity in the AI industry, its AI chips have become the main reference. However, more chipmakers have jumped into the AI market as well which is also part of the investors’ concerns.