Nvidia shares slide after sales forecast underwhelms investors

"Shareholders have lingering questions over whether the current AI spending wave can sustain growth beyond the next few years, and whether Nvidia will remain as dominant as AI shifts from training models to running everyday tasks, analysts at Hargreaves Lansdown said in a note after the results."

"You need compute capacity, and that translates directly to growth, and that translates directly to revenues, Huang said. I'm confident their cash flows are growing."

"Investor Michael Burry, made famous by The Big Short, added to the worries on Thursday. He noted that Nvidia has purchase obligations of $95.2 billion, compared with $16.1 billion a year earlier. That could be risky if demand wavers."

Nvidia experienced its worst stock decline in three months after reporting first-quarter guidance that, while exceeding analyst expectations and showing 73% fourth-quarter revenue growth, failed to ease investor concerns about an AI bubble. Shareholders question whether current AI spending levels can be maintained beyond the next few years and whether Nvidia will retain dominance as AI shifts from model training to operational deployment. CEO Jensen Huang argued customers are already profiting from their computing investments, justifying continued elevated spending. However, investor Michael Burry highlighted risks, noting Nvidia's purchase obligations surged to $95.2 billion from $16.1 billion annually. CFO Colette Kress addressed supply chain concerns, stating the company has secured sufficient components to meet demand.

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