UPDATE 2-Nvidia forecasts quarterly revenue above estimates, announces $80 billion share buyback
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Updates share movement, adds details in paragraphs 11 to 13
May 20 (Reuters) - Nvidia NVDA.O forecast second-quarter revenue above Wall Street expectations on Wednesday, and announced an $80 billion share repurchase program.
Shares of the company were marginally down in extended trading.
The world's most valuable company expects revenue of $91 billion, plus or minus 2%, compared with estimates of $86.84 billion, according to data compiled by LSEG.
Nvidia's results are largely considered a barometer for the AI market's health, as its chips are used in virtually every major data center in the world, powering the largest and most advanced models.
The company also said it would increase its quarterly cash dividend from 1 cent per share to 25 cents per share.
Spending on AI infrastructure continues to grow rapidly, with U.S. tech giants, including Alphabet GOOGL.O, Amazon AMZN.O and Microsoft MSFT.O, expected to spend more than $700 billion on AI this year, a sharp jump from around $400 billion in 2025.
While heavily relying on Nvidia's expensive processors, the companies are also pouring funds into developing their own custom chips to run models, posing a risk to Nvidia's long-held dominance over the chip industry.
Those chips are targeted at inferencing - the process by which AI responds to user queries - which represents a much larger market than training.
Nvidia is facing competition not only from Big Tech but also from other chip rivals, including Intel INTC.O and Advanced Micro Devices AMD.O, which have touted a large revenue opportunity from the inference market.
The Santa Clara, California-based company has made moves to defend its position. It unveiled a new central processor and AI system built on technology from Groq - a chip startup specializing in inference - in March.
Nvidia reported first-quarter revenue of $81.62 billion, beating analysts' average estimate of $78.86 billion, according to data compiled by LSEG.
Data center revenue in the quarter came in at $75.2 billion, compared with the average analyst estimate of $72.8 billion.
On an adjusted basis, the firm earned $1.87 per share, compared with market estimates of $1.76.