Nvidia Corp., the chipmaker at the center of the artificial intelligence spending boom, reported decent but not outstanding quarterly results on Wednesday, and investors, accustomed to explosive performance, responded with a shrug.
Nvidia said in a statement that its sales for the first fiscal quarter ending in April would reach approximately $43 billion. Analysts on average expected sales of $42.3 billion, with some estimates as high as $48 billion.
The company also warned that its gross margin would be lower than expected due to its rush to launch a new chip design called Blackwell. In addition, US tariffs could also affect its performance. After fluctuating between gains and losses, Nvidia’s share price fell by less than 1% in the late trading on Wednesday.
The outlook for the artificial intelligence industry is mixed. Nvidia’s share price has dropped this year amid concerns that data center operators will slow their spending. The Chinese startup DeepSeek has also raised concerns that chatbots can be developed cheaply, which could reduce demand for Nvidia’s powerful AI chips.
Although Nvidia executives have addressed most of the issues, it is becoming increasingly difficult for the company to release a sensational earnings report.
Edward Jones analyst Logan Purk said in a report: “The outlook is slightly disappointing.” But he said early sales of the Blackwell chip should help ease investors’ concerns after earlier reports of production delays.
In the fourth quarter, Blackwell brought in $11 billion in revenue for Nvidia, which the company called the “fastest product growth” in its history. CEO Jensen Huang said in a statement: “The demand for Blackwell has been astonishing.”
Although the company’s sales in the fourth fiscal quarter exceeded analysts’ expectations, the extent of the increase was the smallest since February 2023. Meanwhile, according to data compiled by Bloomberg, the profit growth rate was the smallest since November 2022.
After surging in 2023 and 2024 and making Nvidia the world’s most valuable chipmaker, the stock has dropped by 2.2% this year.
Nvidia has been the biggest beneficiary of the sharp increase in artificial intelligence spending, with its revenue doubling over the past two years. Many of the largest technology companies have invested tens of billions of dollars in data center hardware, and Nvidia is a major seller of processors for developing and running artificial intelligence software.
Over the years, Nvidia and its CEO have become synonymous with the AI revolution and the biggest barometer of AI progress. In the past two years, Huang Renxun, as a disseminator of AI technology, has been traveling around the world. He believes that the spread of AI throughout the economic sector is still in its early stages.
Sales rose to $39.3 billion in the fourth quarter ending January 26. This figure was in line with expectations, although some forecasts had been as high as $42 billion. This highlights the company’s rapid growth: its latest-quarter sales were higher than Nvidia’s annual revenue two years ago, which was $27 billion.
After deducting certain items, earnings per share were 89 cents. Wall Street had expected 84 cents.
Huang Renshun said in a conference call with analysts: “We will achieve strong growth in 2025.”
The data center division is Nvidia’s largest source of revenue to date, with sales reaching $35.6 billion. This exceeded the average expectation of $34.1 billion. Sales of the gaming-related business (which was once Nvidia’s core business) reached $2.5 billion. Analysts had an average expectation of $3.02 billion. Sales of the automotive business were $570 million.
At present, the revenue of the data center department alone has exceeded the combined revenue of its competitors, Intel Corporation and Advanced Micro Devices (AMD).
Nvidia is renowned for selling graphics processors, but later discovered that this technology could also be applied to artificial intelligence. Its chips assist software models during the training process, enabling them to learn to recognize and respond to real-world inputs. Nvidia’s components are also used in systems that run the software (this stage is called inference) and support services such as ChatGPT.
Before the release of its financial report, analysts had expressed concerns about the near-term growth of Nvidia’s largest business, which serves data center customers. The biggest question was whether supply constraints and the transition to Blackwell would slow down growth. The new technology is more complex, presenting manufacturing challenges.
DeepSeek released a powerful AI model, claiming that it required far fewer resources to create, which further intensified people’s concerns. This announcement at the end of January led to a widespread sell-off of AI-related stocks. Nvidia lost an astonishing $589 billion in a single day of trading, setting a market record.
