“The last year, A.I. has made tremendous progress,” Jensen Huang, Nvidia’s chief executive, said during a call with analysts. He said the company’s chips would benefit as spending on A.I. infrastructure increased to $3 trillion to $4 trillion by the end of the decade.
“We’re in the beginning of this build-out,” he said.
Shares of Nvidia fell more than 2 percent in after-hours trading. The decline, even when the company now posts quarterly profits bigger than tech peers like Apple and Meta, spoke to how lofty the expectations are. The company’s board approved a plan to repurchase $60 billion of its stock, signaling its confidence in its prospects.
Nvidia’s results have been closely watched since OpenAI released its ChatGPT chatbot in late 2022, igniting an A.I. boom. The company’s fortunes have soared as tech companies have flocked to buy its chips, which are ideal for powering the development of A.I. Nvidia has grown into the market’s most significant stock, accounting for 7.5 percent of every dollar in the S&P 500, up from 3 percent in December. Its results also influence the values of tech and energy companies with A.I. businesses.
“The question has been: Will the A.I. wave continue or could it meaningfully slow down?” said Melissa Otto, the head of research at S&P Global Visible Alpha. Failing to meet expectations would be “like a grenade on the market,” she said. “It could blow up a lot of things.”
In recent months, demand for Nvidia’s newest chip, the Blackwell, has been especially scrutinized. Sales of the product, released late last year, have accelerated, with the company distributing about 72,000 Blackwell chips a week for an estimated price of $30,000 each.