Although it posted record revenue of more than $81 billion in the first quarter, shares fell after the financial results were released.
Nvidia's financial results were met with apathy by investors, who were concerned about the ability of the $5.4 trillion company to maintain its growth rate despite the solid performance.
Wall Street previously estimated for the world's most valuable company that sales would be around $79 billion, but those were far exceeded.
Nvidia also announced an additional $80 billion in share buybacks and raised its quarterly dividend from $0.01 per share to $0.25, making it one of the largest dividend payers in the U.S., with about $24 billion annually.
Despite Chief Executive Jensen Huang again praising the “tremendous speed” and trajectory of AI data center investments, shares of the chip group at the heart of the AI boom fell 1.3 percent in trading after the results were announced.
Daniel Newman, chief executive of market intelligence firm The Futurum Group, said Wednesday that “there is a law of large numbers: Nvidia is starting to become more like an Apple. A safe place to invest,” Newman said. “As investors pursue outsized returns, they are looking at other AI players that may have higher market cap growth potential.”
Nvidia has been the main beneficiary of a global boom in artificial intelligence infrastructure, as tech giants Google, Microsoft, Amazon and Meta expanded their spending plans to $725 billion in 2026 after years of huge investments.
Chipset earnings serve as a barometer of the health of the AI ecosystem. Stocks linked to the technology have seen rapid gains in recent months, leading to much of the overall US market's gains.
Nvidia has generated nearly a fifth of the S&P 500's year-to-date gains, according to Bloomberg data.
The semiconductor group reported that revenue rose 85% from a year earlier – marking 15 consecutive quarters in which Nvidia beat Wall Street's revenue estimates.
Data center revenue, which refers to Nvidia's chip systems for artificial intelligence infrastructure, nearly doubled year over year to $75.2 billion. Net profit rose to $58.3 billion.
Nvidia generated $50.3 billion in net cash from its operating activities in the quarter — up from $27.4 billion in the same quarter a year earlier.
Huang has been under pressure to return more funds to shareholders as the cash pile piles up.
The company continued to funnel massive amounts of cash into closing deals during the quarter, with net cash used in investing activities reaching $26.4 billion, up from $5.2 billion in the same quarter last year.
Melissa Otto, head of research at Visible Alpha, said the increase in buybacks and dividends was “really fantastic,” but investors are focused on Nvidia's growth prospects.
The buyback and dividend increase showed Nvidia has “confidence in our long-term outlook for available cash flow,” CFO Colette Kress told analysts.
Nvidia is also facing increasing competitive pressure from customers such as Google and Amazon, and rivals such as AMD and Intel, which offer technologies that compete with its graphics processing units.
Huang joined President Donald Trump's visit to China to meet with President Xi Jinping last week, raising hopes that Beijing will reverse its current stance on importing Nvidia's H200 chips.
The White House gave the green light to these chip sales late last year. But despite receiving US licenses to ship to 10 Chinese customers, Nvidia is waiting for the country's authorities to allow domestic technology companies to proceed.
US officials said last week that semiconductors were not a major topic in the talks. During Huang's visit, China banned the import of Nvidia's China-specific gaming chip, the RTX 5090D V2.
