Chipmaker NVIDIA Corporation reported stronger-than-expected results for the January quarter on Wednesday and issued revenue guidance for the current quarter that exceeded market forecasts. The company continues to benefit from sustained spending by major technology firms on artificial intelligence infrastructure and advanced AI processors.
Despite the earnings beat, Nvidia shares traded largely flat in after-hours trading. Investors, accustomed to consistent and substantial revenue outperformance over the past 14 consecutive quarters, appeared underwhelmed by the results. The timing of the release, which came slightly later than expected, also added to the muted reaction.
During the post-earnings conference call, UBS analyst Tim Arcuri questioned whether Nvidia planned to return more of its projected $100 billion in annual cash generation to shareholders. He noted that, despite strong financial performance, the stock had not risen significantly. Chief Financial Officer Colette Kress responded that Nvidia intends to continue reinvesting heavily in the AI ecosystem rather than prioritizing larger capital returns.
Chief Executive Officer Jensen Huang emphasized that artificial intelligence will form the backbone of future computing systems. He stated that Nvidia remains committed to expanding infrastructure to support growing AI workloads, adding that this new computing paradigm is here to stay.
To address concerns about supply constraints at its contract manufacturer TSMC, Nvidia said it has secured sufficient chip inventory and production capacity to meet demand in the coming quarters. However, the company acknowledged that supply limitations may continue to impact its gaming segment.
Nvidia forecasts fiscal first-quarter revenue of $78 billion, plus or minus 2%, compared with analysts’ average estimate of $72.60 billion, according to LSEG data. January-quarter revenue surged 94% year over year to $68.13 billion, topping estimates of $66.21 billion. Adjusted earnings came in at $1.62 per share, above expectations of $1.53.
Analysts noted that while the results and guidance were solid, much of the positive outlook had already been priced into the stock. Ken Mahoney, CEO of Mahoney Asset Management, said the company delivered another “beat and raise,” but investor expectations were already elevated.
Nvidia’s performance remains a key barometer for the broader AI sector. Major hyperscalers, including Meta Platforms, continue to ramp up capital expenditure, with total spending projected to reach at least $630 billion in 2026, largely directed toward data centers and AI processors. According to TECHnalysis Research, current results show little evidence of an AI spending slowdown.
At the same time, competition in AI chips is intensifying. Advanced Micro Devices (AMD) is preparing to launch a new flagship AI server later this year and has secured agreements with key Nvidia customers, including Meta. Meanwhile, Alphabet Inc. has expanded the use of its in-house Tensor Processing Units (TPUs) and reached agreements to supply AI developer Anthropic. Reports suggest Alphabet is also in discussions to provide chips to Meta.
Large technology companies are increasingly designing their own processors to reduce reliance on external suppliers, creating longer-term competitive risks for Nvidia. In addition, customer concentration remains notable. During the latest fiscal year, two customers accounted for 36% of total sales, compared with three customers representing 34% in the previous year.
Nvidia also stated that its current-quarter guidance does not include expected revenue from China data center chip sales. While the company recently received U.S. government licenses to ship limited quantities of its H200 chips to Chinese customers, broader export restrictions remain in place. AMD, by contrast, has reintroduced AI chip sales to China into its forecast after receiving approval to ship certain modified processors.
Finally, Nvidia announced that it will begin including stock-based compensation expenses in its non-GAAP financial metrics. The move comes as technology companies compete aggressively to attract and retain leading AI engineers and researchers, with stock-based incentives forming a central component of compensation packages.
