Nvidia – results beat estimates, but Wall Street wants more cash return
- Nvidia’s Q1 revenue forecast exceeds market estimates
- Big Tech’s AI investments drive Nvidia’s chip demand
- Nvidia faces competition from AMD and Google’s in-house chips
Feb 25 (Reuters) – Chipmaker Nvidia (NVDA.O), posted better-than-expected results for the January quarter on Wednesday and forecast current-quarter revenue above market estimates, betting on Big Tech’s unabated spending on its artificial-intelligence processors.
But its stock traded flat after hours, as investors, used to solid revenue beats from the company for 14 straight quarters, were likely disappointed by the uneventful results that were released 10 minutes after the expected time.
On the post-earnings conference call, UBS analyst Tim Arcuri asked executives whether Nvidia was looking to give back to shareholders some of the $100 billion cash it was likely to generate this year, because “no matter how good the results have been, the stock hasn’t really gone up much.” In response, Nvidia Chief Financial Officer Colette Kress said the company wanted to keep investing in the AI ecosystem.
CEO Jensen Huang said the output generated by AI models would be the foundation of future computing and Nvidia would keep building more infrastructure to support that. “This new way of doing computing is not going to go back,” he said.
Seeking to alleviate concerns that a supply crunch at its chip contract maker TSMC (2330.TW),, was getting in the way of its growth, Nvidia said it had secured enough chip inventory and capacity to meet demand beyond the next several quarters. The shortage, though, will affect its gaming business, the company said.
The world’s most valuable company expects fiscal first-quarter sales of $78 billion, plus or minus 2%, compared with analysts’ average estimate of $72.60 billion, according to data compiled by LSEG.
Ken Mahoney, CEO at Mahoney Asset Management, which holds shares of Nvidia, said:
This was a good beat and raise, the usual for Nvidia, but based on the reactions preliminarily, it seems a lot was baked in to the cake so far,
CUSTOMER CONCENTRATION
The fourth-quarter results are good news for AI investors, who are looking to Nvidia’s performance to gauge whether the hundreds of billions of dollars that Big Tech is pouring into data center infrastructure are paying off. Hyperscalers including Meta Platforms (META.O), a big Nvidia customer – have forecast total capital expenditure of at least $630 billion in 2026, with most of the spending earmarked for data centers and processors.
READ the latest news shaping the AI Chips market at AI Chips News
Nvidia – results beat estimates, but Wall Street wants more cash return, source
Add comment