US chip giant Nvidia reported yet another record quarter with sales and profits beating expectations, seemingly suggesting there's no slowdown in sight for the artificial intelligence (AI) boom.

Nvidia is a central player in AI infrastructure, providing chips to leading AI model developers including OpenAI and Meta, meaning its results are closely watched.

The company said first-quarter revenue was up 85% on the year to $81.6bn (£60.7bn), while net income more than tripled to $58.3bn.

However, shares in the firm fell 1.6% in after-hours trading with analysts saying investors have got used to Nvidia delivering stellar results and amid some concerns that it will face growing competition.

Nvidia is the world's most valuable company, with a stock market value of around $5.3 trillion.

In its latest results, it said sales were driven by strong growth in its data centre division.

It forecasts spending on AI infrastructure to be between $3tn and $4tn a year by the end of this decade.

"Demand has gone parabolic," chief executive Jensen Huang told analysts on a conference call. "The reason is simple: the era of agentic AI is here."

The company also said it was returning cash to shareholders by raising its quarterly dividend from one cent per share to 25 cents, and announcing an £80bn share buyback programme.

It predicts overall revenues to continue growing and to reach $91bn in the second quarter.

'The bar is very high'

But its shares fell in extended trading, which Ruth Foxe-Blader, managing partner at US venture capital firm Citrine Venture Partners, put down to "a law of large numbers".

"Nvidia represents 8% of the S&P 500. Unless there's a belief in this continued parabolic growth it's difficult for investors to get super excited, although Nvidia posted outstanding numbers," she told the BBC.

"But it's just investors seeking that hypergrowth, which is indicating an early sell-off."

Victoria Scholar, head of investment at interactive investor, agreed that while it was a strong quarter for the company, "the bar is very high for the artificial intelligence bellwether which has made a habit out of delivering incredibly impressive results.

"Plus investors 'bought the rumour, sold the fact' as shares had already rallied ahead of earnings," she added.

"There are some concerns among Nvidia investors about the growing threat of competition as the data centre landscape shifts and hyperscalers develop their own chips."

'Largely conceded' China

Nvidia's AI chips have been a major focus of the rivalry between the US and China.

In January, the Trump administration began allowing the company to sell its H200 chips to Chinese customers under certain conditions.

The H200, Nvidia's second most advanced semiconductor, had previously been restricted by Washington over concerns that it would give China's technology industry and military an edge over the US.

However, to date the company has not been given approval to sell the chips by the Chinese authorities who want to boost their own domestic suppliers.

Last week, Huang was a last-minute addition to a host of top US CEOs accompanying President Donald Trump on his official trip to Beijing, though it is unclear whether semiconductors were discussed and if so, to what degree.

In Wednesday's results the company said it was not assuming any revenue from data centre chip sales to China in the current quarter, and Huang told CNBC he'd "largely conceded" the market to Chinese tech giant Huawei.

But Alvin Nguyen, senior analyst at Forrester, said it was apparent that Nvidia could still flourish even without the Chinese market.

"By effectively excluding China and conceding that market to Huawei, Nvidia is demonstrating that global AI demand outside China is more than enough to sustain its growth." (BBC)

Update news