When Nvidia lost its $600 billion market value in the first day of last month, that’s because some investors were afraid of the future of artificial intelligence chip makers. Chinese startup Deepseek said it has created an AI system with a small portion of the AI chips used by other companies, creating a small portion of the cost.
On Wednesday, Nvidia showed that these fears were exaggerated, even as its rapid pace of growth slowed. The company said the purchase of AI pioneer AI chips increased its total revenue to $39.33 billion in the three months ended in January, up 78% from the previous year to 78%. Profits rose 80% to $220.9 billion.
In the last quarter, Nvidia reported more than doubled its revenue and profits. However, continuing to offer such a kind of profit has become more difficult as its sales and profits rose. (For businesses like Nvidia, growth rates are generally slower after an incredible increase in duration, a phenomenon known as a number of laws.)
Nvidia’s quarterly results exceeded Wall Street analysts’ expectations for $38.32 billion in revenue and $21.08 billion in profit. The company predicted its current quarter revenue would increase by 65% from a year ago to $43 billion.
NVIDIA shares remained pretty flat in after-hours trading after an increase of 3.7% on Wednesday. It remains the second most valuable public company in the world behind Apple.
Nvidia’s business is supported by the non-stop spending of the largest tech companies on AI data centers. After pouring tens of millions of dollars into new infrastructure last year, Amazon, Microsoft, Alphabet and Meta say they each will spend between $65 billion and more than $100 billion this year.
Much of that money flows straight to Nvidia. The company, by some estimates, controls 90% of the Graphic Processing Unit (GPU) market to its power AI systems. It rolls out a new, more powerful AI chip series known as Blackwell, which charges between $60,000 and $70,000 for signing chips. Blackwell donated $11 billion in sales during the quarter.
How long data center build-outs will last have been questionable since the start of the AI boom. Deepseek challenged the technology industry’s consensus that businesses need to build bigger, more powerful data centers to build bigger, better AI systems. It sparked fear that businesses might pull back spending with Nvidia.
Since then, a new consensus has been revealed that Nvidia will continue to make profits as more companies will become more affordable for NVIDIA to develop AI systems. The AI business expansion area will generate more customers, as we were initially afraid, due to Nvidia’s expensive tips.
Data center revenue, including sales of chips, cables and high-performance computing, rose 93% from the previous year to $355.8 billion, according to Nvidia.
“We’re committed to working with people who are looking to stay with us,” said Brian Mulberry, client portfolio manager at Zacks Investment Management, a financial company that tracks Nvidia. “Everyone is still competing.”
Nvidia has been bounced back since late January, but concerns about data centre spending continue to whip stocks. Stocks fell nearly 6% earlier this week after Wall Street analysts reported that Microsoft had cancelled several data center contracts. Microsoft did not respond to requests for comment.
Nvidia CEO Jensen Huang said in a call with analysts Wednesday that the company will benefit as Blackwell chips change the way companies develop AI because they are stronger and more versatile than their predecessors. There is also visibility into the amount spent on the data center. He said this will increase as businesses introduce new tools, such as AI agents, which allow them to autonomously perform tasks such as online shopping.
“The next wave is coming,” Fan said. He said, “We’re at the heart of this development and we can see some amazing activity going on.”
“We successfully increased the massive scale production of Blackwell AI Supercomputers, achieving billions of dollars in sales in the first quarter. AI is moving forward at the speed of light.”
Nvidia continues to face geopolitical challenges as well. The Biden administration has introduced rules to curb the sale of chips to China and to limit AI chip sales to more than 100 countries. Howard Lutnick, the Trump administration’s secretary of commerce, told Congress during his confirmation hearing, including China, that tech companies, including Nvidia, “need to help.”
Since the US government began limiting chip exports, Nvidia’s sales in China have been reduced from half of its total revenue to around 15%. The company said it does not believe that China’s sales will rebound.
Later last month, Fan visited the White House to discuss AI and semiconductors with President Trump. Trump later told reporters he could not tell him whether he would ban Nvidia’s chip sales more to China. He also threatens tariffs on semiconductors, including Nvidia chips made in Taiwan.
Colette Kress, Nvidia’s finance chief, said the company is monitoring tariffs. “That’s unknown until we understand more about what the US government’s plan is, when it is, where and how much,” she said. “We’re waiting.”
