Tech company's lukewarm projection shows certain fallout from a growing U.S.-China rivalry.

Nvidia shares fell about 2% in extended trading following its second-quarter earnings report Wednesday. Justin Sullivan - Getty Images.

By IAN KING | BLOOMBERG

Nvidia Corp., the world's most valuable publicly traded company, gave a tepid revenue forecast for the current period, fueling concerns that a massive run-up in artificial intelligence spending is slowing.

Sales will be roughly $54 billion in the fiscal third quarter, which runs through October, the company said in a statement Wednesday. Though that was in line with the average Wall Street estimate, some analysts had projected more than $60 billion. The forecast excluded data center revenue from China, a market where it has struggled with U.S. export restrictions and opposing pressure from Beijing.

The outlook adds to concern that pace of investment in artificial intelligence systems is unsustainable. The difficulties in China also have clouded Nvidia's business. Though the Trump administration recently eased curbs on exports of some AI chips to that country, the reprieve hasn't yet translated into a rebound in revenue.

Nvidia shares fell about 2% in extended trading following the announcement. They had rallied 35% this year through the close, lifting the company's market capitalization above $4 trillion.

The company also approved an additional $60 billion in stock buybacks. Nvidia had $14.7 billion remaining under its previous repurchase plan at the end of the second quarter.

Sales in that period, which ended July 27, rose 56% to $46.7 billion. That compared with an average estimate of $46.2 billion. Though the gain added more than $16 billion in quarterly revenue from a year earlier, it was the smallest percentage increase in more than two years. Profitwas $1.05 a share, minus certain items. Wall Streetwas looking for $1.01.

The data center unit, a division that's now larger by itself than any other chipmaker, had sales of $41.1 billion. That compares with an average estimate of $41.3 billion. Gaming­ related revenue - once Nvidia's main source of income -was $4.29 billion. Analysts projected $3.8 billion on average. The automotive segment generated $586 million in sales, a bit shy of estimates.

Nvidia is still dealing with the fallout from a growing U.S.-China rivalry, where semiconductor technology has become a major flashpoint. In April, the Trump administration tightened restrictions on exports of data center processors to Chinese customers, effectively shutting Nvidia out of the market. Washington has subsequently rolled that back, saying that the U.S. will allow some shipments in return for a 15% slice of the revenue.

At the same time, Beijing has encouraged a move away from using U.S. technology in AI systems accessed by the Chinese government. The shifting policies have made it difficult for Wall Street to predict how much revenue Nvidia might be able to recover in the market.