Nvidia projected sales of $91 billion for the three months ending in July, below some investor expectations and leading to a muted market response. Revenue from data center operators continued to rise, supported by strong spending plans from major hyperscalers targeting roughly $725 billion on AI this year. Nvidia increased its quarterly dividend to 25 cents per share from a penny and announced $80 billion in stock repurchases. Investors have grown accustomed to Nvidia exceeding expectations, and the outlook disappointed some of that momentum. Nvidia also faces intensifying competition in AI accelerators from AMD, Broadcom, and Google, challenging its dominance. Despite this, Wall Street expects Nvidia to generate more than a third of semiconductor sector sales this year.
"Sales in the three months ending in July will be $91 billion, the company said in a statement late Wednesday. Though analysts estimated $87 billion on average, projections ranged as high as $96 billion, according to data compiled by Bloomberg."
"Nvidia also dialed up its shareholder rewards, with the company increasing its quarterly dividend to 25 cents a share from a penny. And the company announced $80 billion in stock repurchases."
"The outlook let down investors who have grown accustomed to Nvidia shattering expectations. The company also is facing the first major challenges to its dominance in AI computing, with a variety of chipmakers trying to carve out of a piece of the business."
"Nvidia is the top seller of so-called AI accelerators, chips used to develop artificial intelligence models. But it faces growing competition from across Silicon Valley. Advanced Micro Devices has rival processors, and Broadcom and Alphabet's Google are attacking the market with their own technology."
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