Nvidia’s stock dropped sharply last night despite the chipmaker more than doubling sales to a record $30bn (£22.8bn) in a reaction that will fuel fears of a tech bubble.

Shares in the world’s second-largest publicly traded company lost as much as 8pc in fluctuating trading after its quarterly results were released on Wednesday night.

The market’s negative reaction came despite beating average analyst predictions of $28.9bn in sales. The rise to $30bn meant revenues were more than double what they were in the same quarter just a year ago.

Nvidia’s revenues have surged amid a boom in interest in artificial intelligence (AI). Its chips are seen as the most advanced for such applications.

Jensen Huang, founder and chief executive of the company, said on Wednesday night: “Nvidia achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.”

The company has become one of the most closely watched stocks in the world and is viewed as a barometer for both the health of the tech industry and, more broadly, the US economy.

Michael Ashley Schulman, chief investment officer of Running Point Capital, said Nvidia’s results were “an indicator for the rest of the technology industry, and technology as an industry is an indicator for the rest of the market because many sectors are now technology dependent.”

However, a surge in Nvidia’s stock and the wider tech industry has driven fears of a possible bubble. Keith Buchanan, of Globalt Investments, said on Wednesday: “Nobody has their arms around how long Nvidia can continue to surprise on the upside, but, naturally, it can’t last forever.”

Shares fell more than 7pc in overnight trading despite Nvidia announcing plans for a $50bn share buyback to reward investors.

Before the results were released, shares had dropped by as much as 4.4pc on Wednesday and Wall Street had closed lower.

Giddy shareholder sentiment surrounding Nvidia was on display on Wednesday as investors hosted an Nvidia “watch party” in New York, with the company’s earnings call played over the bar’s speakers.

“It’s hard to think of a more eagerly awaited set of corporate earnings than Nvidia’s,” said Neil Birrell, chief investment officer at Premier Miton Investors ahead of the report. “There’s little doubt that equities will be driven by the tech sector, for good or for bad, in the next few days.”

Nvidia’s stock has risen by almost 3,000pc since 2019 as its graphics processing units – or GPUs – enjoyed surging demand.

Tech giants and sovereign nations have ordered tens of thousands of these chips to train AI bots amid surging interest in ChatGPT, the chatbot developed by Silicon Valley start-up OpenAI.

Under Mr Huang, Nvidia’s market capitalisation hit $3 trillion in June and it was briefly ranked as the world’s most valuable private company. The company’s meteoric rise has given Mr Huang a net worth of around $110bn.