Nvidia has reported a significant increase in revenue for the quarter ending in January, driven by strong demand for its artificial intelligence-focused chips. The company announced that its sales grew by 78% year over year to $39.3 billion, surpassing estimates in a Bloomberg survey of $38.3 billion. Nvidia expects to achieve revenue of $43 billion for the current quarter, in line with Wall Street expectations.
Despite being one of the top-performing stocks on Wall Street in recent years, Nvidia’s shares experienced a decline earlier this year following claims by Chinese AI start-up DeepSeek regarding advancements in performing complex tasks with less advanced chips than competitors like US-based OpenAI.
CEO Jensen Huang dismissed these concerns, emphasizing the strong demand for Nvidia’s latest-generation Blackwell chips. Data center revenues nearly doubled in the January quarter as major tech companies expanded their AI capabilities.
However, the rollout of Blackwell faced some initial challenges, including production issues and reports of overheating in servers with certain chip iterations. Analysts sought reassurance that the transition to the new chip architecture was progressing smoothly and that the demand for Blackwell chips would continue to exceed supply this year.
Net income for the quarter reached $22.1 billion, marking an 80% increase from the same period in the previous year. Despite this growth, gross margins declined to 73% from 76%.
Nvidia’s CFO, Colette Kress, attributed the decrease in margins to the transition to the more complex and higher-cost Blackwell systems. She highlighted that Blackwell generated $11 billion in revenue for the quarter.
Following the earnings report, Nvidia’s shares rose 2% in after-hours trading in New York, building on a nearly 4% increase during the regular trading session.
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