Nvidia Surges Past Wall Street Forecasts as AI-Driven Data Center Revenue Soars 73%
Nvidia delivered a blockbuster quarterly earnings report on Wednesday, surpassing Wall Street projections for both earnings and revenue. The standout performer was its data center segment—home to its highly sought-after AI chips—which saw a remarkable 73% year-over-year growth. Following the announcement, Nvidia shares climbed approximately 6% in after-hours trading.Overall, the company’s total revenue jumped by 69% from a year earlier, reaching $44.06 billion. This beat analysts’ expectations of $43.31 billion, according to LSEG. Earnings per share came in at 96 cents adjusted, edging past the forecast of 93 cents.While Nvidia projected around $45 billion in revenue for the current quarter—slightly below the $45.9 billion expected by analysts—it noted the forecast was impacted by a U.S. export restriction. The company revealed that if not for the ban on its H20 processors destined for China, it would have guided approximately $8 billion higher.The U.S. government informed Nvidia that its H20 chips, once cleared for export, would now require a special license. As a result, Nvidia reported a $4.5 billion charge for excess inventory and said it missed out on $2.5 billion in potential sales. The setback dragged the company’s gross margin down to 61%, although it would have been 71.3% without the China-related write-down.On the earnings call, CEO Jensen Huang was blunt, saying the $50 billion AI chip market in China is now “effectively closed to U.S. industry.” He emphasized, “The H20 export ban ended our Hopper data center business in China.”Despite geopolitical complications, Nvidia’s financial results highlight its aggressive expansion, primarily fueled by demand for AI infrastructure. Huang reiterated the company’s strong global position, stating, “Global demand for Nvidia’s AI infrastructure is incredibly strong.”Net income rose to $18.8 billion, or 76 cents per share, up 26% from $14.9 billion, or 60 cents per share, in the same quarter last year. With the post-earnings boost, Nvidia stock now trades less than 5% below its record high from January and is at its highest level in four months.The data center segment generated $39.1 billion in revenue, accounting for a staggering 88% of Nvidia’s total revenue. Cloud providers represented just under half of this figure. The company also reported $5 billion in networking sales—critical for connecting Nvidia’s chips in AI research environments.Microsoft was cited as a key customer, with CFO Colette Kress revealing that the tech giant has already deployed tens of thousands of Blackwell GPUs. Microsoft is expected to scale that up to hundreds of thousands, particularly to support its collaboration with OpenAI.Nvidia’s gaming division, historically its core business, also performed well, posting 42% growth to $3.8 billion. Although now overshadowed by AI, the division still plays a crucial role. Its chips power 3D gaming and are rumored to be at the core of the upcoming Nintendo Switch 2 console. These gaming chips are also adaptable for AI use.The automotive and robotics segment reported a 72% increase to $567 million, thanks to higher demand for Nvidia’s autonomous driving software and hardware. The company’s professional visualization division, which includes 3D design chips and its DGX Spark and DGX Station AI desktops, saw a 19% revenue bump to $509 million.During the quarter, Nvidia returned $14.1 billion to shareholders via share buybacks and distributed $244 million in dividends.
Nvidia delivered a blockbuster quarterly earnings report on Wednesday, surpassing Wall Street projections for both earnings and revenue. The standout performer was its data center segment—home to its highly sought-after AI chips—which saw a remarkable 73% year-over-year growth. Following the announcement, Nvidia shares climbed approximately 6% in after-hours trading.Overall, the company’s total revenue jumped by 69% from a year earlier, reaching $44.06 billion. This beat analysts’ expectations of $43.31 billion, according to LSEG. Earnings per share came in at 96 cents adjusted, edging past the forecast of 93 cents.While Nvidia projected around $45 billion in revenue for the current quarter—slightly below the $45.9 billion expected by analysts—it noted the forecast was impacted by a U.S. export restriction. The company revealed that if not for the ban on its H20 processors destined for China, it would have guided approximately $8 billion higher.The U.S. government informed Nvidia that its H20 chips, once cleared for export, would now require a special license. As a result, Nvidia reported a $4.5 billion charge for excess inventory and said it missed out on $2.5 billion in potential sales. The setback dragged the company’s gross margin down to 61%, although it would have been 71.3% without the China-related write-down.On the earnings call, CEO Jensen Huang was blunt, saying the $50 billion AI chip market in China is now “effectively closed to U.S. industry.” He emphasized, “The H20 export ban ended our Hopper data center business in China.”Despite geopolitical complications, Nvidia’s financial results highlight its aggressive expansion, primarily fueled by demand for AI infrastructure. Huang reiterated the company’s strong global position, stating, “Global demand for Nvidia’s AI infrastructure is incredibly strong.”Net income rose to $18.8 billion, or 76 cents per share, up 26% from $14.9 billion, or 60 cents per share, in the same quarter last year. With the post-earnings boost, Nvidia stock now trades less than 5% below its record high from January and is at its highest level in four months.The data center segment generated $39.1 billion in revenue, accounting for a staggering 88% of Nvidia’s total revenue. Cloud providers represented just under half of this figure. The company also reported $5 billion in networking sales—critical for connecting Nvidia’s chips in AI research environments.Microsoft was cited as a key customer, with CFO Colette Kress revealing that the tech giant has already deployed tens of thousands of Blackwell GPUs. Microsoft is expected to scale that up to hundreds of thousands, particularly to support its collaboration with OpenAI.Nvidia’s gaming division, historically its core business, also performed well, posting 42% growth to $3.8 billion. Although now overshadowed by AI, the division still plays a crucial role. Its chips power 3D gaming and are rumored to be at the core of the upcoming Nintendo Switch 2 console. These gaming chips are also adaptable for AI use.The automotive and robotics segment reported a 72% increase to $567 million, thanks to higher demand for Nvidia’s autonomous driving software and hardware. The company’s professional visualization division, which includes 3D design chips and its DGX Spark and DGX Station AI desktops, saw a 19% revenue bump to $509 million.During the quarter, Nvidia returned $14.1 billion to shareholders via share buybacks and distributed $244 million in dividends.
