Nvidia shares fall despite record sales

Nvidia recently released its latest quarter earnings and everyone, including shareholders and investors, were waiting to see if the data would have a positive or negative impact on their stake.

Despite posting record revenues of $30 billion in the past three months, their shares saw a minor drop. With the start of the boom in artificial intelligence, it was not the company OpenAI that profited the most, but Nvidia and other developers of chips for artificial intelligence tasks. Nvidia has risen to the very top, surpassing the market value of 3 trillion (US trillion) dollars.

Simon French, head of research at Panmure Liberum, says that analysts have become accustomed to Nvidia's spectacular sales growth over the past year, but that growth is no longer as fast as in previous months. Nvidia still beat analysts' forecasts of $28.7 billion in revenue. Not only did they exceed that number, they increased their sales by 122 % compared to last year.

Shares were down 6 % in afternoon trading in New York after the report was released. They fell by another 2 % on Thursday, but are still up 150 % since the start of the AI boom.

Announcing the latest results, Nvidia CEO Jensen Huang said: "Generative AI will revolutionize all industries."

"If you're going to raise expectations that high, then you have to keep growing at the speed of light," says French. He added that the current AI chip (Hopper) is still selling well, but the successor (Blackwell) is facing problems and delays in production, which could also be one of the reasons why the stock has fallen despite record sales.

In all likelihood, Nvidia will continue to be a company that will drive stockholders and investors into a frenzy. Nvidia's CEO in the iconic leather jacket is also nicknamed the "Taylor Swift of technology." Although they are synonymous with artificial intelligence, it can also be a double-edged sword for them. If AI fails to meet all expectations, they can expect losses.

"It's not enough to just create a thousand use cases, the market demands a million," says veteran analyst Alvin Nguyen.