Nvidia’s AI Chip Boom Drives $91 Billion Revenue Forecast

Nvidia is once again showing how central it has become to the artificial intelligence boom. The company forecast second-quarter revenue of $91 billion, plus or minus 2 percent, beating Wall Street expectations of $86.84 billion. Alongside the strong outlook, Nvidia announced an $80 billion share buyback program and raised its quarterly cash dividend from 1 cent per share to 25 cents. Even with those major announcements, Nvidia’s shares slipped in extended trading, showing that investors are still watching closely for signs of tougher competition and long-term pressure.

Nvidia’s results are often seen as a key measure of the AI market’s strength because its chips power many of the world’s largest and most advanced AI models. The company reported first-quarter revenue of $81.62 billion, above analyst estimates of $78.86 billion. Its data center business remained the biggest driver, bringing in $75.2 billion, compared with expectations of $72.8 billion. On an adjusted basis, Nvidia earned $1.87 per share, also beating market estimates. These results show that demand for AI hardware remains extremely strong as companies continue building more powerful data centers.

The growth is being driven by massive spending from major technology companies. U.S. tech giants such as Alphabet, Amazon, and Microsoft are expected to spend more than $700 billion on AI this year, a sharp increase from around $400 billion in 2025. Nvidia CEO Jensen Huang told analysts that he believes Nvidia can grow even faster than these large “hyperscale” customers. He pointed to a newer group of AI-focused cloud companies in Nvidia’s data center business, saying their sales were roughly equal to major cloud players but growing faster quarter over quarter.

At the same time, Nvidia is facing growing competition. Many of its biggest customers still depend heavily on Nvidia’s expensive processors, but they are also investing in their own custom chips. These chips are especially focused on inference, which is the process of AI responding to user questions and requests. Inference is expected to become a much larger market than training AI models, making it a key area for future growth. Nvidia also faces pressure from chip rivals such as Intel and Advanced Micro Devices, which are trying to capture more of the inference market.

Nvidia is moving quickly to protect its lead. The company recently unveiled a new central processor and AI system built on technology from Groq, a chip startup focused on inference. Huang also highlighted Nvidia’s new Vera central processors, which he said open access to a $200 billion market. Nvidia expects about $20 billion in Vera chip revenue by the end of this fiscal year, and Huang said this was not included in the company’s earlier $1 trillion forecast for Blackwell and Rubin AI chips from 2025 to 2027. However, he also said the company expects to remain supply-constrained through the life of the Vera Rubin platform.

To avoid supply-chain problems, Nvidia is spending heavily during a global memory chip crunch. The company said its supply rose to $119 billion in the fiscal first quarter, up from $95.2 billion in the previous quarter. Nvidia also disclosed $30 billion in cloud computing agreements, up from $27 billion, which it said would support research and development. While Nvidia continues to post massive results and strong forecasts, the bigger question is whether it can maintain its dominance as AI spending grows, competition increases, and the

market shifts more toward inference.

Works Cited

Kachwala, Zaheer, Stephen Nellis, and Max A. Cherney. “Nvidia Forecasts Revenue above Estimates, Announces $80 Billion Share Buyback.” MSN, 20 May 2026, www.msn.com/en-ca/money/topstories/nvidia-forecasts-revenue-above-estimates-announces-80-billion-share-buyback/ar-AA23Gicf. 

Nellis, Stephen, Max A. Cherney, and Zaheer Kachwala. “Nvidia Bets on New Data Center

Chips for Growth as Sales Outlook Tops Estimates.” Yahoo Finance, 20 May 2026, finance.yahoo.com/markets/stocks/articles/nvidia-forecasts-quarterly-revenue-above-202423200.html. 

Reuters. “Nvidia Forecasts Quarterly Revenue above Estimates, Announces $80 Bln Share Buyback.” Al Arabiya English, 21 May 2026, english.alarabiya.net/business/technology/2026/05/21/nvidia-forecasts-quarterly-revenue-above-estimates-announces-80-bln-share-buyback.  

“Artificial Intelligence Technology Concept.” Bloomberg,  assets.bwbx.io/images/users/iqjWHBFdfxIU/iAVe81hloMOw/v0/1200x800.jpg. 

“Nvidia Technology Concept Image.” Bloomberg, assets.bwbx.io/images/users/iqjWHBFdfxIU/i.MnAVa04WXU/v8/1800x1200.webp.