Jakarta, INTI - Chipmaker Nvidia reported better than expected results for the January quarter on Wednesday and projected current-quarter revenue above market forecasts, supported by continued heavy spending from major technology companies on its artificial intelligence processors.
However, the company’s shares traded flat in after-hours trading, as investors, accustomed to 14 consecutive quarters of strong revenue outperformance, appeared underwhelmed by what they viewed as routine results, which were released 10 minutes later than scheduled.
During the post-earnings conference call, Tim Arcuri of UBS asked whether Nvidia planned to return part of the roughly $100 billion in cash it is expected to generate this year to shareholders, noting that “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 intends to continue reinvesting in the AI ecosystem.
Chief Executive Officer Jensen Huang emphasized that the output produced by AI models will underpin the future of computing and that Nvidia will keep expanding infrastructure to support this shift. “This new way of doing computing is not going to go back,” he said.
Addressing concerns that supply constraints at contract chip manufacturer TSMC (2330.TW) could hinder growth, Nvidia stated that it has secured sufficient chip inventory and production capacity to meet demand for the coming quarters. The company acknowledged, however, that shortages could impact its gaming segment.
The world’s most valuable company forecast fiscal first-quarter revenue of $78 billion, plus or minus 2%, compared with analysts’ average estimate of $72.60 billion, according to data compiled by LSEG.
“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,” said Ken Mahoney, CEO of Mahoney Asset Management, which holds Nvidia shares.
Customer Concentration
The fourth quarter performance provides reassurance to AI focused investors who are monitoring Nvidia’s results to determine whether the hundreds of billions of dollars that major technology companies are investing in data center infrastructure are generating returns.
Hyperscale companies such as Meta Platforms (META.O), a major Nvidia client, have projected total capital expenditures of at least $630 billion in 2026, with most of that spending directed toward data centers and processors.
“It’s clear from Nvidia’s latest numbers and their forecast that concerns about an AI slowdown simply are not showing up yet,” said Bob O'Donnell, chief analyst at TECHnalysis Research.
Despite its strong performance, there are emerging signs that Nvidia’s long-standing dominance in AI chip manufacturing could face challenges. Smaller competitor AMD (AMD.O) is preparing to launch a new flagship AI server later this year and has secured agreements with some of Nvidia’s largest customers, including Meta Platforms.
At the same time, Google under Alphabet Inc. has become a significant competitor after striking a deal to supply its proprietary TPU chips to Claude chatbot developer Anthropic. According to media reports, Google is also in discussions to provide chips to Meta.
Major technology companies are increasingly pursuing in-house chip development as they seek greater computing power, allocating substantial resources to design proprietary processors deployed within their own data centers.
Nvidia’s revenue concentration among a limited number of key customers increased during its recently completed fiscal 2026, with two clients accounting for 36% of total sales. In the prior fiscal year, three customers represented 34% of overall revenue.
No China Revenue Yet
Nvidia reported that January-quarter revenue surged 94% year-on-year to $68.13 billion, exceeding market expectations of $66.21 billion. Adjusted earnings reached $1.62 per share, above analysts’ estimates of $1.53, according to data compiled by LSEG.
The company stated that its current-quarter outlook does not include any projected revenue from data-center chip sales to China. However, Nvidia disclosed that it received licenses from the U.S. government this month allowing it to ship “small amounts” of its H200 chips to Chinese customers. These sales had previously been restricted under U.S. export controls.
Rival AMD has reintroduced AI chip sales to its current-quarter forecast after obtaining approval to ship certain modified processors to China.
Nvidia also announced that it will incorporate stock-based compensation expenses into its non-GAAP financial metrics, amid intensifying competition among technology firms to recruit and retain top AI engineers and researchers.
“Stock-based compensation is a foundational component of Nvidia's compensation program to attract and retain world-class talent,” the company said in a statement.
Conclusion
Nvidia continues to deliver strong financial performance, driven by sustained AI infrastructure spending from major technology players. However, intensifying competition from AMD and Google, growing customer concentration, and evolving geopolitical dynamics, particularly around China, highlight the increasingly complex landscape of the AI chip market.
While Nvidia remains at the center of the AI revolution, investor expectations are rising, and the company’s next phase of growth will depend not only on revenue expansion but also on strategic capital allocation and competitive resilience.
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