BY COMFORT OGBONNA
Nvidia chief executive Jensen Huang sought to reassure investors on Wednesday that the chipmaker can sustain its extraordinary growth trajectory, driven by expanding demand for artificial intelligence infrastructure and a widening customer base across the global technology sector.
Huang said the company expects continued momentum in its flagship AI chip business, projecting that long-term sales tied to its next-generation products could surpass $1 trillion, even as competition intensifies and investors question whether the current AI boom can maintain its pace into the late 2020s.
Despite the upbeat outlook, Nvidia shares slipped about 1.6% in extended trading, suggesting that markets are becoming more cautious about future growth expectations even after another strong earnings performance and a new $80 billion share buyback program.
The company forecast second-quarter revenue of $91 billion, plus or minus 2%, exceeding Wall Street expectations of $86.84 billion, according to data compiled by LSEG. Nvidia’s results continue to serve as a key indicator of the health of the global AI industry, given its dominant role in supplying chips used to train and run advanced artificial intelligence models in data centers worldwide.
Industry analysts say Nvidia’s performance reflects both the strength and the uncertainty of the AI investment cycle. While demand for AI computing infrastructure remains strong, questions are growing about how long hyperscale spending will continue at its current pace.
According to eMarketer analyst Jacob Bourne, Nvidia’s consistent earnings beats have already been priced into the stock, shifting investor focus toward the company’s ability to sustain growth through 2027 and 2028. He noted that the industry is increasingly moving toward inference workloads and facing rising competition from custom silicon developed by major cloud providers.
Spending on AI infrastructure continues to surge globally, with major U.S. technology companies including Alphabet, Amazon and Microsoft expected to collectively invest more than $700 billion in AI-related infrastructure this year.
Huang said Nvidia expects to grow faster than these “hyperscale” customers, pointing to a rising segment of AI-focused cloud providers that are becoming an increasingly important part of the company’s data center business. He added that sales to these customers are now comparable to large cloud providers but are expanding more rapidly on a quarter-to-quarter basis.
However, Nvidia faces growing competitive pressure from both established chipmakers and Big Tech firms developing in-house processors designed to reduce dependence on external suppliers. Companies such as Advanced Micro Devices and Intel are positioning themselves to capture share in the expanding AI inference market.
At the same time, major customers are investing heavily in custom chip designs, raising concerns that Nvidia’s long-standing dominance in AI accelerators could face gradual erosion over time.
In response, Nvidia has been expanding its product roadmap to defend its leadership position. The company has introduced new central processing units and integrated AI systems designed to complement its existing GPU lineup and strengthen its position in next-generation computing architectures.
During the earnings call, Huang highlighted a new chip family known as “Vera,” which he said opens access to a potential $200 billion market opportunity. Nvidia expects around $20 billion in revenue from Vera chips by the end of the current fiscal year, although this was not included in its earlier trillion-dollar projections tied to its Blackwell and Rubin AI chip platforms.
Huang also said demand for upcoming product platforms remains exceptionally strong, but cautioned that supply constraints could persist throughout the product lifecycle due to global manufacturing pressures and memory chip shortages.
To address supply challenges, Nvidia has significantly increased its inventory and supply commitments, reporting $119 billion in supply in the fiscal first quarter, up from $95.2 billion in the previous quarter.
The company posted first-quarter revenue of $81.62 billion, beating analyst expectations, while data center revenue reached $75.2 billion, underscoring the continued dominance of AI-related demand in its business mix.
Adjusted earnings came in at $1.87 per share, above market forecasts of $1.76 per share, according to LSEG data.
Nvidia also disclosed approximately $30 billion in cloud-related agreements, reflecting its deep integration into global AI infrastructure development. Some analysts have described these commitments as financial safeguards that ensure capacity expansion and secure long-term demand for Nvidia-powered systems.
As competition intensifies and the AI sector matures, Nvidia’s ability to maintain its leadership will increasingly depend on whether its product roadmap can stay ahead of both custom silicon development and shifting customer spending patterns across the global technology industry.