Nvidia Results Add to Investors' AI Concerns

Nvidia's sales of its artificial intelligence chipsets rose at a slower pace than analysts anticipated during the company's latest quarter, a letdown likely to stoke worries that the AI craze has been fool's gold.

• The results announced Wednesday were hotly anticipated because Nvidia has emerged as a bellwether of a two-year-old AI boom that has been propelling the stock market to new heights while making the Silicon Valley chipmaker the first publicly traded company with a $4 trillion market value, the AP reports.

• In recent weeks, though, research reports and comments by prominent tech executives have raised investor fears that the AI mania has been overblown. Now, Nvidia's latest numbers covering the May-July period may feed those perceptions because sales of the company's processors, which are indispensable components that power the technology in data centers scattered around the world, appear to be decelerating slightly faster than investors thought they would.
• The AI chips are part of Nvidia's data center division, which posted revenue of $41.1 billion, a 56% increase from the same time last year but below the analyst forecast of $41.3 billion, according to FactSet Research.
• Even so, Nvidia's profit of $26.4 billion, or $1.08 per share, was higher than analysts predicted, as was its total revenue of $46.7 billion. But Nvidia's stock still slipped nearly 3% in extended trading after the fiscal second quarter report came out, indicating the performance wasn't enough to allay investors' fears.
• The Wall Street Journal reports that Nvidia's stock price has almost doubled since early April, when President Trump barred the company from selling its H20 chips to China. Trump allowed sales to resume last month after Nvidia agreed to give the government a 15% cut.