Nvidia reports stratospheric growth as AI boom shows no sign of stopping

Nvidia reported record quarterly earnings on Wednesday after exploding corporate appetite for artificial intelligence.

The next industrial revolution has begun and companies and countries are partnering with Nvidia to produce a new commodity: artificial intelligence, said Jensen Huang, Nvidia’s founder and CEO.

The company brought in $26 billion in revenue in the first quarter of fiscal 2025, up 18% from the fourth quarter and up 262% from a year ago. Net profit was $14.88 billion, up from $2 billion a year earlier.

The artificial intelligence chipmaker, whose fortunes are interpreted as a drag on the emerging AI transformation, reported earnings per share of $5.98, up 21% from the previous quarter and up 629% from a year earlier. . Investors had expected revenue of $24.65 billion and earnings per share of $5.59, according to CNBC. The company also announced it will split its stock, currently trading at $962, 10 for one on June 7.

Investors had been anticipating another successful set of financial results, but they also wanted to see that the tech giant’s spending on Nvidia’s chips was as impressive as they expected. And it was.

Nvidia defies gravity again as AI companies globally continue to depend on its chips, networking hardware and software ecosystem, said eMarketer analyst Jacob Bourne.

Bourne said the tech giants’ public praise of Nvidia was a telltale sign of its dominance and that they want to reduce their dependence on the company, but realize they’re not quite there yet.

Tech giants Amazon, Google, Meta and Microsoft have all signaled that they plan to spend $200 billion this year on the chips and data centers needed to train and operate their AI systems. Apple has said it will announce its AI strategy next month. Nvidia is seen as the leading provider of chips best suited to power AI.

The company has earned more than $1.1 trillion in value this year alone. At the end of 2022, Nvidia was worth $359 billion. Now, halfway through 2024, it’s worth $2.33 trillion. That’s just $500 billion less than Apple and $900 billion less than Microsoft, the two most valuable US-based companies.

Chipmakers’ earnings announcement has become one of the most important events on the macro calendar, according to Deutsche Bank strategist Henry Allen.

Analysts are warning that no stock goes in a straight line forever. Nvidia’s price-to-earnings (P/E) ratio is a massive 79.95-to-one. By contrast, Microsoft is at 36 and Apple at 29. But Nvidia is also earning nearly $0.50 for every dollar in sales in recent net income.

Can I proceed with the request? Nvidia’s chips are now so desired that they are distributed by armored car. On Tuesday, its shares fell 5% after Amazon, a major customer, told the Financial Times it was waiting for orders for Nvidia’s new Blackwell superchip.

There is also the issue of China. In line with the Biden administration’s crackdown on electric vehicles made in China, the administration has denied the company from selling its top-tier semiconductors in China.

Dan Ives at Wedbush Securities says investors will be listening closely to AI godfather Jensen when he speaks after the results are reported. The AI ​​revolution starts with Nvidia, and in our opinion, the AI ​​party is just getting started with the popcorn being made, he says.