Nvidia's $39B revenue surge driven by AI chip demand

Nvidia has surpassed Wall Street expectations in its latest earnings report, posting a nearly 80% year-over-year revenue increase driven by strong demand for its AI-focused microchips.

For the fiscal year 2025, ending January 26, the company reported quarterly revenues of $39.3 billion, a 12% rise from the previous quarter and a 78% increase from the same period last year.

Wall Street analysts, including Zacks Investment Research, had projected revenue of $37.72 billion and earnings per share of 84 cents.

However, Nvidia exceeded expectations with reported earnings of 89 cents per share.

CEO Jensen Huang attributed the surge to high demand for the company’s Blackwell microchips, designed for AI, machine learning, and high-performance computing.

"AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionise the largest industries," Huang stated.

Nvidia's data center segment, which includes chips, cables, and high-performance computing sales, contributed over 90% of total revenue, reaching $35.6 billion—a 93% year-over-year increase.

Shares of Nvidia (NVDA) closed on February 26 with a 3.67% increase at $131.28, but fell 1.49% in after-hours trading to $129.32.

In late January, Nvidia’s stock experienced a significant drop of nearly 17% after the release of a rival AI model by Chinese firm DeepSeek, erasing almost $600 billion in market value.

The company stated that DeepSeek’s AI model used "widely available models and computation that is fully compliant with export controls."

Looking ahead, Nvidia projects quarterly revenue of approximately $43 billion, representing an expected 65% year-over-year growth.