Nvidia Beats Expectations Amid AI Boom

Leading artificial intelligence (AI) chipmaker Nvidia reaffirmed the strength of the AI industry, posting a 78% revenue surge and an 80% increase in per-share profit.

Large cloud computing providers accounted for about half of Nvidia’s data center sales. I Photo: Nvidia

CEO Jensen Huang expressed even greater optimism about the company’s next-generation Blackwell chip, Barron’s Daily reporters Tae Kim and Liz Moyer wrote.

For the January quarter, Nvidia reported adjusted earnings of 89 cents per share on revenue of $39.3 billion, surpassing analysts’ expectations. Looking ahead, the company projected revenue for the current quarter to reach approximately $43 billion—exceeding the consensus estimate of $42.1 billion.

Data center revenue rose to $35.6 billion, marking a 93% year-over-year increase. Large cloud computing providers accounted for about half of Nvidia’s data center sales. Meanwhile, Nvidia’s Blackwell GPU architecture generated $11 billion in revenue, making it the fastest-growing product in the company’s history.

Huang highlighted a shift in AI toward reasoning models, which require significantly more computing power than traditional AI models.

Inspired by China’s DeepSeek, these reasoning models need “100 times more computing resources,” he noted.

Despite its success, Nvidia faces challenges. Profit margins are tightening due to the high production costs of its latest data center equipment. Operating expenses for the quarter surged 48%, primarily driven by increased salaries and expansion efforts.

Another looming uncertainty is whether the Trump administration will maintain or modify the Biden-era restrictions on AI technology exports to China. Any further clampdown on sales to China and other markets could impact Nvidia’s growth trajectory.