Nvidia reported a boost in its dividend and exceeded earnings and revenue expectations, achieving adjusted gross margins of 75%. Despite these positive results, the stock fell in extended trading, reflecting investor concerns about Nvidia's ability to maintain its market share in the increasingly competitive AI chip sector.
The recent shift towards a more decentralized architecture in AI, termed the 'agentic' phase, has benefitted other chipmakers like Intel, Micron, and AMD, which have seen their stocks rise. During the earnings call, analysts questioned CEO Jensen Huang about Nvidia's upcoming AI system, Vera Rubin, and its potential impact on the company's share of the inference market.
Huang emphasized that Nvidia's market share in inference is growing rapidly, but the competitive landscape is changing with new entrants and products from companies like Alphabet and Amazon. He also indicated that Nvidia might face supply constraints for the Vera Rubin platform, which could limit its ability to meet demand.
Analysts, including Nicolas Gaudois from UBS, noted that demand for server CPUs, driven by agentic AI, is expected to remain strong, suggesting ongoing opportunities in the market despite the competitive pressures