Nvidia posted a massive quarter, reporting $57 billion in revenue — up 62% year-on-year — and projecting $65 billion for the next period, yet the stock still closed down 3.2%. The reaction has pushed Nvidia back into the spotlight, raising fresh questions about whether AI demand can truly justify the scale of today’s infrastructure spending.
A Record Quarter That Didn’t Calm the Market
The company beat expectations — analysts had forecast $54.9 billion — and highlighted surging demand for its H100 chips and CUDA ecosystem. Still, valuation remains a sticking point: Nvidia trades at a forward P/E near 25 and a current multiple around 51, a level that fuels ongoing debate about sustainability as its market cap repeatedly hits new highs.
Survey data adds to the caution. Around 45% of global managers now cite an AI-stock bubble as their biggest risk, according to Bank of America. Combined with position cuts from several major investors, selling pressure intensified right after earnings.
Nvidia’s growth also relies on a small group of large customers, creating a concentration risk that traders watch closely. The stock’s beta above 2 — signaling high volatility — underscores that sensitivity. At the same time, concerns about potential overcapacity loom, with the key question being whether today’s massive data-center spending will convert into durable, profitable returns.
Competition is heating up fast. AMD targets 15%–20% market share by the end of 2025, while Intel, Google, Amazon, and cloud providers with in-house chips race to challenge Nvidia’s dominance. Emerging players like Etched.ai and Modular add even more pressure on pricing and market share over the long run.
Geopolitics introduces another layer of uncertainty. Export restrictions on advanced chips to China have forced Nvidia to design lower-powered Blackwell variants, and Jensen Huang has called the rules “a failure.” These frictions — alongside competition and customer concentration — help explain why a record quarter wasn’t enough to quiet valuation concerns.
The quarter reinforces Nvidia’s technological and commercial strength, but it also leaves unresolved the core vulnerabilities that matter most for institutional investors: valuation, competition, and concentration risk.