May 20 (Reuters) – Nvidia forecast second-quarter revenue above Wall Street expectations on Wednesday, and announced an $80 billion share repurchase program.
Shares of the company were down over 2% in extended trading.
The world’s most valuable company expects revenue of $91 billion, plus or minus 2%, compared with estimates of $86.84 billion, according to data compiled by LSEG.
Nvidia’s results are largely considered a barometer for the AI market’s health, as its chips are used in virtually every major data center in the world, powering the largest and most advanced models.
The company also said it would increase its quarterly cash dividend from 1 cent per share to 25 cents per share.
Spending on AI infrastructure continues to grow rapidly, with U.S. tech giants, including Alphabet, Amazon and Microsoft, expected to spend more than $700 billion on AI this year, a sharp jump from around $400 billion in 2025.
While heavily relying on Nvidia’s expensive processors, the companies are also pouring funds into developing their own custom chips to run models, posing a risk to Nvidia’s long-held dominance over the chip industry.
Those chips are targeted at inferencing – the process by which AI responds to user queries – which represents a much larger market than training.
Nvidia is facing competition not only from Big Tech but other chip rivals, including Intel and Advanced Micro Devices, which have touted a large revenue opportunity from the inference market.
The Santa Clara, California-based company has made moves to defend its position. It unveiled a new central processor and AI system built on technology from Groq – a chip startup specializing in inference – in March.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Shinjini Ganguli)
