Nvidia's 77% Growth Forecast Barely Moves Stock—Here's Why

When a company forecasts 77% revenue growth and still can't move its stock price, you know expectations have reached stratospheric levels. That's exactly what happened to Nvidia after its latest earnings report—a company now worth nearly $5 trillion that somehow feels like it's running out of ways to surprise investors.

The Numbers That Should Have Shocked Everyone

Nvidia just delivered its 11th consecutive quarter of growth above 55%, with Q1 revenue expected to hit $78 billion—crushing analyst estimates of $72.6 billion. The data center business, powered by AI chips, now represents over 91% of total sales.

CEO Jensen Huang kept repeating one phrase during the earnings call: "In this new world of AI, compute equals revenue." He's betting everything on agentic AI—the next evolution beyond simple chatbots that can actually run businesses with text prompts.

The company just shipped its first Vera Rubin samples, promising 10 times better performance per watt than current systems. CFO Colette Kress expects "every model builder and cloud provider" to eventually deploy these systems.

The Competition Is No Longer Sleeping

But here's why investors aren't celebrating: the AI chip monopoly is cracking. Advanced Micro Devices is launching Helios, its first rack-scale AI system, later this year. Meta just committed to deploying up to 6 gigawatts of AMD GPUs, with shipments starting in 2026.

Even more threatening are Nvidia's biggest customers turning into competitors. Amazon and Google are pouring billions into in-house AI chips. In its annual filing, Nvidia explicitly acknowledged the risk that "customers develop their own internal solution."

It's the classic innovator's dilemma: teach your customers to fish, and eventually they stop buying fish from you.

The $50 Billion Elephant in the Room

China represents Nvidia's biggest missed opportunity. Huang estimated China's AI market could reach $50 billion within 2-3 years, calling missing out a "tremendous loss."

Despite Trump's January announcement approving H200 chip sales to China (with the U.S. government taking 25% of sales), Nvidia hasn't generated any actual revenue yet. Kress confirmed they're "not assuming any data center compute revenue from China" in their outlook.

That's a massive question mark hanging over future growth—especially as domestic Chinese competitors like Baidu and Alibaba accelerate their own chip development.