Chipmaker Nvidia reported a rise in its financials for the quarter ended January 2025 – something that was driven by heightened demand for its AI chips. For the quarter ending January 26, 2025, the company achieved a record $39.3Bn in revenue, marking a 78% rise from the same period the previous year and a 12% increase from the prior quarter. Net income for this period reached $22.1 billion, or $0.89 per diluted share, marking an overall surge of 80% compared to the corresponding quarter last year.
One of the biggest contributors to Nvidia’s performance is its Data Center segment, which reported revenues of $35.6 billion in the fourth quarter — a 93% year-over-year increase – and accounted for a majority of Nvidia’s performance3 for the quarter. This surge is largely attributed to the robust demand for Nvidia’s Blackwell GPU, which was officially announced last year and brings faster processing speed, amongst other features. “Demand for Blackwell is amazing as reasoning AI adds another scaling law—increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter,” Nvidia CEO Jensen Huang noted in an official statement.
In addition to this, the company’s gross margin for the fourth quarter stood at 73.0%, a decrease of 3 percentage points from the previous year. This decline is attributed to the increased complexity and associated costs of producing newer data center products. Nvidia anticipates that as production scales, particularly with the Blackwell architecture, gross margins will improve, returning to mid-70% levels later in the fiscal year. “Long-thinking, reasoning AI can require 100 times more compute per task compared to one shot inferences,” Colette Kress, Nvidia CFO, commented on the matter.
The company itself has been one of the biggest beneficiaries of the ongoing AI race, especially since its chips (and that by other tech companies) have been part of the driving force behind the recent advancements in AI technology. The rise in demand for its GPUs saw its market valuation cross the $3 trillion-mark last year, overtaking Apple. However, Nvidia’s growth trajectory has not been without challenges, though, and the recent emergence of cost-effective AI models from competitors, such as China’s DeepSeek, has introduced new complications into the AI chip market. However, it seems that Nvidia’s leadership remains optimistic on the matter, even as the likes of DeepSeek are offering a more cost-effective alternative (reducing the need for Nvidia’s chips for AI).
Looking ahead, the enterprise aims to generate first-quarter revenue of approximately $43 billion, plus or minus 2%. This forecast moves past analysts’ expectations, which were around $42.1 billion. Despite the strong financial results, Nvidia’s shares experienced slight fluctuations in after-hours trading, initially dipping by 0.5% but later rising by 2.5%. The firm’s shares are currently priced at $125.81.
