Nvidia Nearly Doubles Revenue Amid Surging AI Demand

Nvidia has reported third-quarter earnings that exceeded Wall Street expectations, underscoring its continued dominance in the artificial intelligence (AI) hardware market. Despite slightly dipping 2% in extended trading, Nvidia’s results highlight impressive growth driven by its data center business and next-generation AI chips.

Key Earnings Highlights

• Earnings per share: $0.81 (adjusted) vs. $0.75 expected
• Revenue: $35.08 billion, up 94% YoY, surpassing the $33.16 billion forecasted
• Q4 Forecast: $37.5 billion (+/- 2%), slightly above analyst expectations

AI Boom Fuels Data Center Growth

Nvidia’s data center division, which houses its AI processors and networking products, reported $30.8 billion in revenue, a 112% YoY increase. This accounted for the bulk of the company’s earnings, reflecting high demand from partners like Microsoft, Oracle, and OpenAI.

• Blackwell AI Chip: Nvidia’s next-generation AI chip is in full production, with 13,000 samples shipped. Despite supply constraints, Blackwell is projected to generate "several billion dollars" in Q4 revenue.
• H200 AI Chip: The current generation saw significant growth, complementing Blackwell’s rollout.

Other Business Segments

• Gaming: Revenue rose to $3.28 billion (vs. $3.03 billion expected), driven by GPU demand for PCs, laptops, and gaming consoles like Nintendo Switch.
• Automotive: $449 million, up 72% YoY, fueled by chips for self-driving cars and robotics.
• Professional Visualization: $486 million, up 17% YoY.

Profitability

Nvidia’s net income nearly doubled to $19.3 billion, while gross margins rose to 73.5%, reflecting strong sales of high-margin AI chips.

Challenges and Outlook

• Supply Constraints: Demand for Blackwell chips is expected to exceed supply through fiscal 2026.
• Geopolitical Risks: Nvidia remains committed to complying with potential U.S. trade policies and tariffs.

Future Growth

CEO Jensen Huang emphasized Nvidia’s leadership in AI hardware innovation, as it ramps up Blackwell shipments and addresses robust demand from data centers worldwide. With shares tripling in 2024, Nvidia continues to dominate as the world's most valuable publicly traded semiconductor company.