Shares of AI chip giant Nvidia fall despite record $30 billion in sales

Artificial intelligence chip giant Nvidia said its revenue in the three months to July more than doubled from a year earlier, to a record $30bn (£24.7bn).

But the company’s shares fell more than 6% in New York after the announcement.

Nvidia has been one of the biggest beneficiaries of the AI ​​boom, with its market value rising to more than $3 trillion.

The company’s shares have risen more than 160% this year alone.

“It’s now less of a beat than expected, with markets expecting it to be broken, and today’s outperformance seems a bit disappointing,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

These high expectations are driven by the company’s valuation, which has increased ninefold in less than two years thanks to its dominance in the AI ​​chip market.

Profits rose during the period, with operating income up 174% compared to the same period last year to $18.6 billion.

This was the seventh consecutive quarter that Nvidia beat analysts’ expectations on both sales and earnings.

“Generative AI will revolutionize every industry,” said Jensen Huang, CEO of NVIDIA.

The results have become a quarterly event that sends Wall Street into a frenzy of buying and selling stocks.

A “watch party” was scheduled to take place in Manhattan, according to the Wall Street Journal, while Mr. Hwang, known for his signature leather jacket, was dubbed “Iron Man.” Taylor Swift Technology.

Alvin Nguyen, a senior analyst at Forrester, told the BBC that both Nvidia and Huang had become “the face of AI”.

That has helped the company so far, Nguyen said, but it could also hurt its valuation if AI fails to deliver the desired results after companies have invested billions of dollars in the technology.

“A thousand use cases for AI are not enough, you need a million.”

Mr Nguyen also said Nvidia’s pioneering advantage means it has market-leading products that its customers have spent decades using and a “software ecosystem”.

He said competitors, such as Intel, could “eat away” Nvidia’s market share if they succeeded in developing a better product, though he said that would take some time.