- Nvidia has managed to exceed lofty expectations yet again, with the chip behemoth’s fourth-quarter results beating Wall Street’s forecasts as management also offered bullish guidance. Nvidia earnings are a bellwether for the entire gen AI trade.
Nvidia continued its winning streak on Wednesday, reporting a record quarterly revenue of $39.3 billion, up 12% from the previous quarter and 78% from a year ago, compared to Wall Street’s forecast of $38.3 billion. Sales for the year totaled $130.5 billion, up 114% from the previous year.
The company expects revenue for the next quarter to be $43 billion, slightly higher than the Street’s expectations. Gross margins fell for the second quarter in a row, to 73.5%, matching CFO Colette Kress’s guidance from the previous quarter. She stated that the Blackwell rollout is expected to temporarily reduce margins to the low 70s.
“Another amazing quarter from the company,” said Will Rhind, founder and CEO of GraniteShares, which manages leveraged ETFs that give investors double the exposure to long or short positions in the stock. “The only slight thing that I guess you could probably nitpick on is [margins].”
Today, the company’s data center business accounts for the majority of its sales, as customers, including nearly all of Big Tech, compete to acquire as much compute power as possible. The data center division’s $35.6 billion in revenue increased 93% from the same quarter last year, outperforming the Street’s forecast of $34.2 billion.
Nvidia’s stock increased 171% in 2024, accounting for more than a fifth of the S&P 500’s overall gain. The company’s earnings are regarded as a barometer for the entire generative AI industry, making the chip behemoth’s financial results a watershed moment for the entire equities landscape.
Rhind noted that the latest batch of earnings comes as the market grapples with increased uncertainty over issues such as tariffs and inflation.
“It really feels like the emphasis on this particular earnings call is more important than perhaps any of the others so far,” he told reporters.
Bloomberg reported that options trading ahead of the earnings release implied a 10% move in either direction. The stock rose 3.7% ahead of Wednesday’s results.
Shares remained stable following the customary beat and raise last quarter, indicating investors’ high expectations for future growth. However, the stock fell 18% in August following a modest earnings beat for the second quarter and management’s muted guidance.
This was Nvidia’s first earnings release since Chinese startup DeepSeek released a new AI model that claimed to match American competitors for a fraction of the cost. Nvidia lost nearly $600 billion in market cap on the news, the largest single-day drop for any U.S. company in history.
For now, however, that has not seemed to quell Big Tech’s appetite to spend, with Meta , Amazon , Google , and Microsoft set to invest as much as $320 billion in AI and data center buildouts, per CNBC, citing comments from these companies’ CEOs on earnings calls earlier this year.
The DeepSeek breakthrough has also reportedly spurred more buying of Nvidia’s GPUs in China, where the company’s H20 chips are built to comply with U.S. export controls. There’s also the possibility that Chinese firms are stockpiling in case President Donald Trump imposes additional restrictions.
