Nvidia released fourth-quarter results after the bell on Wednesday, above Wall Street projections. The company also issued solid guidance for this quarter.
The company's report and outlook indicate that the chipmaker is confident in continuing its historic run of AI-driven growth well into 2025. Shares increased by 2% in extended trading.
Here's how the company performed relative to estimates from analysts polled by LSEG.
- Revenue: $39.33 billion, compared to $38.05 billion estimated
- Earnings per share: $0.89 adjusted, compared to $0.84 estimated
Nvidia said it projected $43 billion in first-quarter revenue, plus or minus 2%, compared to $41.78 billion based on LSEG projections. The first-quarter prediction is for a 65% year-over-year growth rate, down from 262% in the same period last year.
Chief Financial Officer Colette Kress stated that the business expects "a significant ramp" in sales of Blackwell, their next-generation AI processor, in the first quarter.
Net income for the quarter increased to $22.09 billion, or 89 cents per diluted share, from $12.29 billion, or 49 cents per share, the previous year.
Nvidia reported a 73% gross margin in the quarter, a three-point decrease from the previous year. The company stated that the drop in gross margin was caused by newer data center products that were more complex and expensive.
Nvidia's revenue continues to grow as the business capitalizes on the AI boom with its data center graphics processors, or GPUs, which account for the vast bulk of the AI accelerator market. Nvidia's sales increased 78% in the quarter, while its total revenue increased 114% to $130.5 billion for the fiscal year.
However, as Nvidia grows in size, its growth rate slows. In the fourth quarter of fiscal 2024, Nvidia's sales more than tripled.
This calendar year, the company's main focus is how quickly it can sell its next-generation AI processors, Blackwell.
Nvidia reported $11 billion in Blackwell revenue during the fourth quarter. In a statement, Nvidia CEO Jensen Huang stated that demand for Blackwell is "amazing," while Kress described it as "the fastest product ramp in our company's history."
"Blackwell sales were led by large cloud service providers which represented approximately 50% of our Data Center revenue," Kress wrote in a press release.
Blackwell sales, as well as prior generation Hopper AI chip sales, are disclosed in the company's data center division. That unit currently accounts for 91% of the company's total sales, up from 83% last year and 60% in 2023. In the last two years, data center income has surged roughly tenfold.
Nvidia reported $35.6 billion in data center revenue in the fourth quarter, a 93% increase over the previous year. That also exceeded StreetAccount's estimate of $33.65 billion.
Nvidia officials told investors that, although its chips were traditionally used to develop or train artificial intelligence, new chips such as Blackwell would be used to provide AI software, a process known as inference.
Kress also addressed investor fears that efficient models like DeepSeek's R1 could reduce the demand for more Nvidia chips. New techniques of running AI models that ask the AI to generate additional information to "think" through responses could necessitate as many as 100 times the number of Nvidia chips, she stated.
"Long-thinking, reasoning AI can require 100 times more compute per task compared to one-shot inferences," Kress pointed out.
"The vast majority of our compute today is inference," Nvidia CEO Jensen Huang informed investors. He stated that next-generation AI algorithms may require millions of times the existing level of processing resources.
Huang also addressed concerns about whether Nvidia's business might be jeopardized by bespoke chips produced by Amazon, Microsoft, and Google.
"Just because the chip is designed doesn't mean it gets deployed," Huang told me.
This quarter, the company's data center division generated $3 billion in sales for its networking components, which are used to connect hundreds of thousands of GPUs. However, while Nvidia had indicated that networking was a potential growth area for the company, networking sales were down 9% year on year.
The company's gaming sector, which includes graphics processors for 3D games, reported $2.5 billion in sales, compared to StreetAccount projections of $3.04 billion. Nvidia's graphics sales fell 11% on an annual basis. During the quarter, the business launched new consumer graphics cards based on the Blackwell architecture used in the company's AI processors.
One of the company’s growth categories is its business selling chips for cars and robots. Nvidia said on Wednesday that it had $570 million in automotive sales during the quarter, which is a small fraction of the company’s AI business but represents a 103% rise on a year-over-year basis.
Nvidia said it spent $33.7 billion on share repurchases in its fiscal 2025.
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