Nvidia
Nvidia reported results that beat expectations in the second quarter.

Nvidia reported results that were better than expected in the second quarter, but its stock still struggled as it faces high memory costs and continues to work at full capacity.

Revenue topped $96 billion compared to $92 billion estimated by analysts, while earnings per share stood at $2.22, compared to the estimated $2.10. Data center sales also beat expectations and its guidance for the current quarter stood at $108 billion, compared to $104.2 billion expected by analysts.

However, the stock slipped after the market closed and before the company's conference call.

Chip stocks have struggled to maintain their momentum following a steep selloff in July, when concerns resurfaced over whether Big Tech companies will ultimately generate sufficient returns from the hundreds of billions of dollars they are spending on AI infrastructure.

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Recent results from Microsoft, Amazon and Google helped ease some of those concerns. Strong growth in their cloud businesses showed continued demand for AI computing capacity. At the same time, investors have become increasingly sensitive to capital spending, with Google and Meta facing scrutiny over plans to continue pouring money into AI.

Nvidia still depends heavily on a relatively small group of hyperscale technology companies, including Amazon, Google and Microsoft. Those customers are spending aggressively on Nvidia hardware, but they are also developing their own AI chips as they attempt to reduce costs and dependence on outside suppliers.

That creates one of Nvidia's biggest longer-term risks. The same companies currently driving its extraordinary growth could eventually become increasingly formidable competitors.

Nvidia, however, is moving beyond simply selling GPUs and positioning itself deeper inside the financing and construction of the global AI infrastructure boom. Earlier this month, the company announced a partnership with BlackRock, Blackstone, KKR, Apollo Global Management, Brookfield and Goldman Sachs aimed at establishing financing platforms capable of mobilizing more than $500 billion in third-party capital for AI infrastructure.