(Bloomberg) – Nvidia (), the world’s most valuable public company, has released a modest revenue forecast for the current period, increasing the concerns that strong growth in investments in artificial intelligence is slowing down.
The company reported in a statement on Wednesday (27) that sales in the third fiscal quarter, which runs until October, should be around $ 54 billion. Although this value is aligned with the average Wall Street estimate, some analysts expected more than $ 60 billion. The forecast does not include the revenue of the Data Center segment in China, a market in which Nvidia faces difficulties due to US export restrictions and Beijing’s government contrary pressure.
That . Difficulties in China have also impacted Nvidia’s business. Although the Trump administration recently flexible restrictions on exporting some AI chips to the country, this has not yet translated into revenue recovery.
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After the announcement, Nvidia’s shares fell about 2% in the After-Market. In the year, they had risen 35%, raising the company’s market value to more than $ 4 trillion.
The company also approved an additional stock repurchase program of $ 60 billion. At the end of the second quarter, there were still $ 14.7 billion to be used in the previous plan.
In the period ended on July 27, as. Despite the increase of more than $ 16 billion compared to the same quarter of the previous year, it was the lowest percentage growth rate in more than two years. The profit per share, discounted certain items, was $ 1.05, exceeding the expectation of US $ 1.01.
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The Data Center unit, which today is larger than any other chip manufacturer, has recorded sales of $ 41.1 billion, slightly below the average estimate of US $ 41.3 billion. Game -related revenue – which was once Nvidia’s main source of income – was $ 4.29 billion, above the average projection of $ 3.8 billion. The automotive segment generated $ 586 million in sales, just below expectations.
Nvidia still faces the effects of the growing rivalry between US and China, where semiconductor technology has become a critical point. In April, the Trump administration hardened restrictions on processor exports to Chinese customers, virtually excluding market nvidia. Subsequently, Washington retreated, allowing some remittances in exchange for a slice of 15% of the revenue.
At the same time, Beijing has encouraged reducing the use of American technology in AI systems accessed by the Chinese government. These changes make Wall Street predictions difficult on how much Nvidia can recover in revenue in China. Some analysts project billions of dollars, while others prefer not to estimate sales in the country until the situation gets clearer.
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Nvidia said it has not recorded H20 AI chip sales to Chinese customers in the second quarter.
Prior to the results report, analysts estimates for third trimester revenue ranged from about $ 15 billion – one of the biggest differences ever recorded in the company’s history.
Under the leadership of co -founder and CEO Jensen Huang, the 32 -year -old chip manufacturer has become one of the biggest success stories in the technology industry. For much of its career, Nvidia lived in the shadow of larger rivals like Intel, modestly surviving with the sale of gamers graphic processors.
Nvidia’s great advance came when she adapted her Graphic Processing Units (GPUS) to run Artificial Intelligence software – what Huang calls fast computing.
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Until 2022, Nvidia was a fraction of Intel’s size and earned less in a year than today in a quarter. Currently, the company is on annual sales of US $ 200 billion, with a projection of exceeding $ 300 billion by 2028, which would represent about one third of the total revenue of the chip industry.
However, Nvidia depends strongly on investment plans for few companies. Microsoft (), Amazon () and other major data centers operators are responsible for about half of sales. To diversify, Huang has invested in new markets and expanded product supply, including complete computers, network equipment, software and services.
He is determined to accelerate the adoption of AI in the economy and presses his team to launch new hardware and software at a rapid pace.
For now, Santa Clara company, California, dominates the AI chips market, known as accelerators. Internal efforts from companies such as Amazon and emerging competitors such as Advanced Micro Devices (AMD) have not yet significantly impacted their participation.
But there are other challenges. In addition to the difficulties in China, the biggest obstacle to growth has been the availability of supply. Like most chip manufacturers, Nvidia does not have its own factories and depends on outsourced production, especially Taiwan Semiconductor Manufacturing (TSMC). Increase the production of new technologies remains a constant challenge.
