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Nvidia’s Profits Soar as Demand for AI Chips Remains Strong
Nvidia’s profits and revenues soared last quarter as a rush among technology companies to build artificial intelligence infrastructure sustained demand for the advanced chips that have made it one of the AI boom’s biggest winners.
Record-Breaking Results
Sales increased 78 per cent year over year to $39.3bn, above estimates in a Bloomberg survey of $38.3bn. Net income surged to $22.1bn, up 80 per cent from a year earlier. The group expects to report revenue of about $43bn for the current quarter.
Chief Executive’s Reassurance
Nvidia chief executive Jensen Huang on Wednesday shrugged off concerns over the impact of Chinese AI start-up DeepSeek’s claims, saying there was "amazing" demand for the group’s latest-generation Blackwell chips. Data centre revenues nearly doubled in the quarter ending January 26 as Big Tech companies swiftly built out AI offerings. Blackwell delivered $11bn in revenue for the quarter.
Analysts’ Views
"DeepSeek threats or disruptions were not evident in Blackwell’s chip demand or data centre revenues," said Dec Mullarkey, managing director at SLC Management. "The earnings were not a blowout, but they didn’t show any glaring vulnerabilities either."
Gross Margins Slip
Gross margins, a measure of profitability that excludes operating expenses, were 73 per cent in the fourth quarter, compared with 76 per cent in the same period last year. The group’s chief financial officer, Colette Kress, attributed the decline to the transition to "more complex and higher cost" Blackwell systems.
Stock Performance
Nvidia’s shares were down 1.2 per cent shortly after Wall Street’s opening bell, but had been trading in positive territory during pre-market trading on Thursday before US President Donald Trump said he would impose an additional 10 per cent tariff on imports from China. The stock had risen almost 4 per cent on Wednesday before the release of its results.
Conclusion
Nvidia’s strong performance is a testament to the growing demand for AI infrastructure, and the company’s ability to capitalise on this trend. Despite some concerns over the impact of DeepSeek’s claims, the group’s results suggest that demand for its chips remains strong.
FAQs
Q: What are the key takeaways from Nvidia’s results?
A: Nvidia’s profits and revenues surged last quarter, driven by strong demand for its AI chips. The group expects to report revenue of about $43bn for the current quarter.
Q: How did Nvidia’s results compare to estimates?
A: Nvidia’s sales increased 78 per cent year over year to $39.3bn, above estimates in a Bloomberg survey of $38.3bn.
Q: What is the outlook for Nvidia’s stock?
A: Nvidia’s shares were down 1.2 per cent shortly after Wall Street’s opening bell, but had been trading in positive territory during pre-market trading on Thursday before US President Donald Trump said he would impose an additional 10 per cent tariff on imports from China.
