Nvidia posts stellar results, but markets hold back: revenue boom amid debt, AI and China concerns

Record-breaking results and an outlook above estimates were not enough to ignite markets. After an initial jump in after-hours trading on Wall Street, Nvidia shares pulled back, while Asian and European markets turned lower and futures slipped. A cautious reaction reflecting lingering questions over the sustainability of the artificial intelligence boom.

The group led by Jensen Huang forecasts revenue of $78 billion for the current quarter, well above the $72.1 billion expected by the market. In the latest fiscal quarter, ended in late January, revenue rose to $68.1 billion (+73% year-on-year), exceeding both prior guidance and analyst estimates. For the first time, annual revenue surpassed the $200 billion mark, with net income reaching $120 billion in fiscal 2026; in the last quarter alone, net profit totaled $43 billion. Data center revenues - the core AI business, including the Blackwell platform - came in at $62.3 billion. Gross margins stood at 75% and are expected to remain around that level throughout the year.

Yet skepticism persists. Nvidia relies on a small group of hyperscalers - including Microsoft, Google, Amazon and Meta - which plan to spend a combined $660 billion in capital expenditures in 2025, largely on AI data centers. These investments are increasingly financed through debt, against a backdrop of record global leverage: according to the Institute of International Finance, global debt has reached $348 trillion, although the debt-to-GDP ratio has declined to 308%.

On the operational side, the shortage of memory chips supplied by SK Hynix, Samsung Electronics and Micron Technology is weighing on visibility over costs and margins. Nvidia says it has secured supply commitments through 2027.

Finally, China remains an open question. Sales of the H200 AI chip are still uncertain amid U.S. restrictions and partial licensing approvals. A potential multibillion-dollar market that, for now, is not included in the company’s guidance. Between explosive AI growth and systemic financial risks, Nvidia’s rally has yet to fully convince global markets.

Andrea Pelucchi