NVIDIA Shares Tumble Amid Slower Growth and RTX 50 Series Troubles Despite Record Revenue

NVIDIA, the AI chip powerhouse, reported its first-quarter fiscal year 2025 earnings, achieving a record revenue of $39.3 billion, up 78% year-over-year, surpassing market expectations. However, the growth rate has noticeably slowed from the 265% increase seen the previous year, prompting concerns about the company's growth prospects. The report marks the first time since fiscal year 2023 that quarterly year-over-year growth has fallen below three digits. data center revenue, a core segment, reached $35.6 billion, up 93% year-over-year, though the growth rate narrowed compared to prior quarters.

Looking forward, NVIDIA's revenue guidance for the next quarter stands at $43 billion, indicating a growth deceleration to 65%. To maintain its current market valuation, nvidia is banking on scaling its Blackwell architecture, expanding the AI market, and enhancing the CUDA ecosystem. With companies like microsoft and Google accelerating their development of proprietary AI chips and clients like OpenAI diversifying their suppliers, NVIDIA's irreplaceability is under scrutiny. Nonetheless, the company dominates the global AI training chip market, holding nearly 95% share, and continues to attract investor interest.

Amid its stock fluctuations, NVIDIA recently rolled out the RTX 50 series graphics cards, which are facing several challenges including cable melting issues, supply shortages, and lower-than-expected intergenerational performance improvements. The newly launched RTX 5070 has especially drawn critical reviews, described by foreign tech critics as "the worst-performing 70 series ever," despite official claims at launch that its performance rivals the previous flagship RTX 4090.

NVIDIA users have also reported software-related glitches such as frequent crashes and black screens when using the RTX 5080 and 5090. The company has claimed that its latest driver version 572.70 resolves these issues, particularly the black screen problem caused by specific monitor connections through the DP interface, as logged in its official update notes.

Simultaneously, NVIDIA's strategic alliances continue to unfold, as illustrated by its collaboration with Japanese telecom giant SoftBank. Announced at the NVIDIA AI Summit in Tokyo, the partnership involves building AI infrastructure, including Japan's largest AI factory, to expedite the nation's sovereign AI agenda. SoftBank plans to develop Japan's most powerful AI supercomputer using NVIDIA's Blackwell B200 GPU, with construction expected to commence in early 2025.

Despite being at the center of these advancements, NVIDIA faces stock sell-offs by several institutional investors who have adjusted their holdings amid cautious market sentiment. Institutions such as Bridgewater and Highbridge have trimmed their positions in NVIDIA, aligning with a broader trend of reducing exposure to major U.S. tech stocks. Additionally, NVIDIA executives, including CEO Jensen Huang, have cashed out shares worth a substantial total this year.