Nvidia shares fell more than four percent in morning trading Thursday even after the chipmaker posted quarterly results that beat Wall Street expectations. The drop reflects growing investor concerns about the sustainability of massive artificial intelligence spending, despite continued explosive growth in revenue.
Nvidia reported fiscal fourth-quarter revenue of $68.13 billion, topping analyst projections of $66.21 billion, according to data cited by CNBC. The figure marked a 73 percent increase compared to the same quarter one year earlier.
The company’s data center division, which includes its AI processors, accounted for 91 percent of total sales. Data center revenue reached $62.3 billion, surpassing consensus estimates of $60.69 billion. Nvidia also issued first-quarter guidance of $78 billion in projected revenue, significantly ahead of analyst expectations of $72.6 billion.
Despite those strong numbers, investors appeared focused on broader questions surrounding AI capital expenditures. Richard Clode of Janus Henderson Investors told CNBC that the market debate has shifted from near-term performance to concerns about the long-term sustainability and monetization of AI infrastructure investments.
The semiconductor sector has faced heightened scrutiny as hyperscale technology companies pour billions into AI systems. In early February, more than $1 trillion in combined market capitalization was temporarily wiped from major tech firms before partial recovery. Analysts warn that markets may be reassessing whether the current pace of AI investment can deliver durable returns.
Nvidia remains the dominant supplier of advanced AI chips used to train and run large language models. However, geopolitical considerations add another layer of uncertainty. CEO Jensen Huang has continued advocating for access to the Chinese market. During a recent visit to Taipei and China, Huang said Nvidia had not yet received orders for its H200 AI chips from Chinese customers as Beijing deliberates whether to permit imports.
The Trump administration has maintained a strong stance on technology exports to China, citing national security concerns. Nvidia’s ability to balance global expansion with compliance under U.S. policy remains a key issue for investors.
While Nvidia’s financial performance underscores robust demand for AI hardware, Thursday’s market reaction suggests Wall Street is increasingly cautious about whether the AI boom represents long-term structural growth or the early stages of an overheated cycle.
