Leading AI chipmaker Nvidia Corp saw its stock fall 8.5% on Thursday – the biggest drop in a month – after delivering quarterly results that were strong but failed to meet investors’ sky-high expectations.
The company guided for fiscal first-quarter sales of about $43 billion, slightly ahead of analysts’ average estimate of $42.3 billion but below some high estimates that had reached $48 billion. The drop in share price comes after concerns that demand for Nvidia’s AI chips could slow due to spending cuts by data center operators.
Additional to the pressure, Nvidia warned that profit margins could be lower than estimates due to the acceleration of the rollout of its new Blackwell chip architecture. The company also faces potential challenges from U.S. tariffs that could impact future earnings.
Nvidia has been one of the biggest winners of the AI boom, with its stock rising sharply in 2023 and 2024, making it the world’s most valuable chipmaker. However, investor sentiment into 2025 has been volatile, with Nvidia’s stock already down 2.2% this year.
The broader AI industry is also facing uncertainty, as cost-effective AI models — such as those developed by Chinese startup DeepSeek — raise concerns that advanced AI applications may not require Nvidia’s high-powered chips in the future.
Despite the stock decline, Nvidia remains at the forefront of AI development, and its upcoming Blackwell chip is expected to play a key role in shaping the next phase of AI computing.
