Chipmaker Nvidia reported its latest financial results on Wednesday, posting $30.04 billion in revenue over the past three months, up 122% from a year earlier, and showing that the artificial intelligence investment mania shows no signs of cooling.
Analysts had expected revenue of $28.7 billion. Shares fell more than 3% in after-hours trading.
On an earnings call, founder and CEO Jensen Huang said he expected Nvidia to ship “a lot more” chips and hardware next year than the company has shipped in its 31-year history.
“The reason our speed is so high is simultaneously because the complexity of the model is growing and we want to reduce its costs, and we want to increase the scale of AI models so that it reaches a level of extraordinary utility and makes the next industrial revolution a reality,” he said.
Analysts cheered the results, despite signs that Nvidia’s extraordinary sales growth could ultimately slow. “The company continues to benefit from a market paradox: Big Tech’s aggressive AI investment strategies are driving massive demand for Nvidia chips, even as these same companies invest in developing their own silicon,” said Jacob Bourne, a technology analyst at Emarketer.
Nvidia has told customers that its next generation of artificial intelligence chips, codenamed Blackwell, will be delayed by several months from January, though early samples are already shipping to a small group of customers. However, its current line of graphics processing units, dubbed Hopper, continues to sell well, CEO Jensen Huang said in a press release.
“Demand for Hopper remains strong and the anticipation for Blackwell is incredible,” Huang said. “Nvidia delivered record revenue as global data centers are working at full speed to modernize the entire computing stack with accelerated computing and generative AI.” The company’s data center revenue, its most closely watched financial metric, rose 154% from a year ago to $26.3 billion.
Recent earnings reports from Nvidia’s major tech customers — Microsoft, Amazon, Meta and Google — which use the company’s chips to build and train their own AI models, indicated increased capital spending as demand for AI continues to rise.
“As competitors like AMD step up their efforts, the timely launch of Nvidia’s next-generation Blackwell chip will be essential to maintaining its dominant position in the increasingly competitive AI chip market,” Bourne said.
The importance of Nvidia’s earnings results to Wall Street can hardly be overstated: the company accounts for 6% of the total value of the S&P 500, currently the third most valuable company in the world by market capitalization at $3.1 trillion.
The index has gained 27% over the past 12 months, but Nvidia is up 167% individually over the same period. But with Big Tech driving US stocks to new all-time highs and spending on Nvidia seen as a sign of future tech gains, Nvidia’s results are a key barometer of the US stock market.
The company also reported earnings per share of $0.68 and announced a $50 billion share buyback. Analysts had expected $0.64 per share for the quarter, compared with $13.5 billion in revenue a year earlier. Earnings are estimated at $15.1 billion, up from $6.2 billion a year earlier.
The company’s latest results, published in May, showed quarterly growth of 18% and 262% annual revenue growthGiven this extraordinary precedent, anything other than a repeat could be considered a disappointment.
Wedbush analyst Dan Ives called Nvidia’s earnings call “the most important week for the stock market this year, and possibly in years.” Ives estimates that for every dollar spent on an Nvidia GPU chip, there is an $8 to $10 multiplier across the entire tech sector.
“Simply put, we expect another spectacular performance from Nvidia as right now Jensen & Co is the only player in town with $1 trillion in AI capex on track for the next few years, with Nvidia GPUs being the new oil and gold in this world,” he added.
Expectations are so high, in fact, that Anthony Saglimbene of Ameriprise Financial… He told Bloomberg that the results could have a bigger impact on the broader market than Federal Reserve Chairman Jerome Powell’s speech last week in Jackson Hole, Wyoming.
But putting so much emphasis on any single action itself relies on the concept that AI will drive global productivity in the coming decades.
The massive $100 billion annual investment in AI has yet to translate into profits for Big Tech, and it remains unclear when that will happen. On the contrary, a set of disappointing results could raise questions (and make us think we are at the peak of AI).
This has led to comparisons with the internet bubble of late 1999, when the sector crashed but then recovered and today the online world we know remains the skeleton that holds it together.
In a market-leading note, Ives said investors may be concerned about the massive spending, but the circumstances are more like 1995, when investment was pouring into Internet infrastructure, rather than 1999, when the bubble burst.
“Tech earnings season has only reinforced and validated this bullish view on tech stocks heading into year-end and 2025,” Ives said.
Just as with Microsoft in the early 2000s, regulators are keeping an eye on Nvidia. Earlier this month, the US Justice Department launched an antitrust investigation into the tech giant. Rival chipmakers have alleged that the company has abused its market dominance to corner the market and force customers to keep buying its products.