Nvidia Corp., the leading AI chipmaker, saw its stock drop 8.5% on Thursday—its steepest decline in a month—after delivering quarterly results that, while strong, failed to meet sky-high investor expectations.
The company reported fiscal first-quarter sales guidance of approximately $43 billion, slightly ahead of analysts’ $42.3 billion average estimate but falling short of some higher projections that reached $48 billion. The dip in stock value follows concerns that demand for Nvidia’s AI chips could slow as data center operators cut spending.
Adding to the pressure, Nvidia warned that profit margins may be tighter than anticipated as it accelerates the rollout of its new Blackwell chip architecture. The company also faces potential challenges from U.S. tariffs that could impact future earnings.
Nvidia had been one of the biggest winners of the AI boom, with its stock soaring in 2023 and 2024, making it the most valuable chipmaker in the world. However, investor sentiment has been shaky in 2025, 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.