Volkswacht Bodensee - Nvidia crushes earnings expectations on AI chip demand

Nvidia reported quarterly sales of $35.1 billion, some $2 billion more than market expectations.

"The age of AI is in full steam, propelling a global shift to Nvidia computing," said founder and chief executive Jensen Huang.

"AI is transforming every industry, company and country."

Huang said that Nvidia's keenly anticipated Blackwell processing platform is in full production and the company is seeing "incredible demand" for the new offering along with current-generation Hopper processors.

"Enterprises are adopting agentic AI to revolutionize workflows," Huang said.

"Industrial robotics investments are surging with breakthroughs in physical AI, and countries have awakened to the importance of developing their national AI and infrastructure."

Nvidia surpassed Apple early this month to become the highest valued company in the world as the artificial intelligence boom continues to excite Wall Street.

Following its quarterly report, Nvidia's share price ebbed nearly two percent in after-hours trading to $143.24.

Investors may have been concerned about the company stating that its margin, the amount of money it makes off processors, is expected to narrow.

"Despite Nvidia's technological leadership through CUDA and its first-mover advantage in AI infrastructure, there's little room for execution missteps in 2025," said Emarketer analyst Jacob Bourne.

"Particularly given uncertainties around Blackwell's rollout and increasing competition from both AMD and key customers' in-house chip development efforts."

The market is also likely weighing geopolitical factors, such as the potential for trade turbulence with China after Donald Trump returns to the White House in January.

Nvidia relies on TSMC in Taiwan for its coveted graphics processing units.

The world's biggest tech companies have invested tens of billions of dollars into Nvidia's powerful AI chips and software to get their ChatGPT-style AI models up and running.

Microsoft, Google, Meta, Tesla and Amazon all depend on Nvidia technology to train generative AI models and execute the heavy computing workloads needed to deploy the new technology.

Ahead of the latest earnings, Nvidia's share price had nearly tripled year-to-date and has accounted for a third of the broad-based S&P 500 index's gains this year.

E.Gasser--VB