(Reuters) – Nvidia on Wednesday forecast third-quarter revenue to be broadly in line with market estimates, failing to impress investors who have fueled a dizzying rally in the stock by betting billions on the future of generative artificial intelligence.

Shares of the Santa Clara, California-based company fell 5% in extended trading. Shares of Nvidia, which closed down 2%, have risen more than 150% so far this year.

Investors have had high hopes for the chipmaker after Nvidia shares surged more than sevenfold over the past two years, making it one of the biggest beneficiaries of the rally in AI-related stocks.

The challenge for the company to exceed expectations grows, as each success prompts Wall Street to raise targets even further.

The company forecast third-quarter revenue of $32.5 billion, plus or minus 2%, compared with analysts’ average estimate of $31.77 billion, according to LSEG data.

Nvidia expects an adjusted gross margin of 75%, plus or minus 50 basis points, in the third quarter. Analysts on average are forecasting a gross margin of 75.5%, according to LSEG data. It reported a gross margin of 75.7% in the second quarter, compared with an average estimate of 75.8%.

Revenue in Nvidia’s data center segment grew 154% to $26.3 billion in the second quarter ended July 28, topping estimates of $25.15 billion. It was up 16% from the first quarter.

Total revenue in the second quarter was $30.04 billion, exceeding estimates of $28.70 billion.

The company expects to generate multibillion-dollar revenues from its latest Blackwell chips in the fourth quarter, addressing widespread concerns that reported production delays could hamper growth.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Arun Koyyur)