The chipmaker announces robust demand and revenue exceeding expectations, despite competitors investing in developing their own chips
Nvidia announced record-breaking quarterly revenue, driven by the surge in corporate interest in artificial intelligence.
“The next industrial revolution has commenced—companies and countries are collaborating with Nvidia … to create a new essential: artificial intelligence,” stated Jensen Huang, Nvidia’s founder and CEO.
The company achieved $26 billion in revenue in the first quarter of fiscal year 2025, marking an 18% increase from Q4 and a remarkable 262% increase from the previous year. Net profit soared to $14.88 billion, up from $2 billion a year earlier.
The AI chip maker, seen as a key indicator of the ongoing AI revolution, revealed that its earnings per share stood at $5.98, marking a 21% increase from the previous quarter and a significant 629% increase from the previous year. CNBC reported that investors had anticipated revenue of $24.65 billion and earnings per share of $5.59. The company also disclosed plans to split its stock, which is currently trading at $962, into a 10-for-one split on June 7th.
Investors were expecting another exceptional set of financial results and were keen to see if big tech spending on Nvidia’s chips lived up to their expectations. It did.
“Nvidia continues to defy gravity as AI companies worldwide rely on its chips, networking hardware, and software ecosystem,” remarked eMarketer analyst Jacob Bourne.
Bourne noted that the tech giants’ public praise of Nvidia indicated its dominance and that while they aim to reduce their reliance on the company, they recognize they are not yet in a position to do so.
Tech giants Amazon, Google, Meta, and Microsoft have all indicated their intention to invest $200 billion this year in chips and data centers necessary for training and operating their AI systems. Apple has announced that it will unveil its AI strategy next month. Nvidia is considered the leading provider of chips ideally suited for powering AI.
The company’s value has surged by over $1.1 trillion this year alone. At the end of 2022, Nvidia was valued at $359 billion. Now, halfway through 2024, its value stands at $2.33 trillion. This is only $500 billion less than Apple and $900 billion less than Microsoft, the two most valuable companies in the US.
According to Deutsche Bank strategist Henry Allen, the chipmaker’s earnings announcement “has become one of the most important events on the macro calendar.”
Analysts caution that no stock can sustain a continuous upward trajectory indefinitely. Nvidia’s price-to-earnings (P/E) ratio is currently at a significant 79.95-to-one. In comparison, Microsoft’s P/E ratio is 36, and Apple’s is 29. However, Nvidia is also generating nearly $0.50 in bottom-line net income for every dollar in sales.
The question arises: Can Nvidia keep up with the demand? The company’s chips are in such high demand that they are delivered in armored vehicles. On Tuesday, Nvidia’s stock price fell by 5% after Amazon, a major customer, revealed to the Financial Times that it was experiencing delays in receiving orders for Nvidia’s new superchip, Blackwell.
There’s also the issue of China. Following the Biden administration’s crackdown on Chinese-made electric vehicles, the administration has prohibited the company from selling its top-tier semiconductors in China.
Dan Ives at Wedbush Securities notes that investors will be paying close attention to AI pioneer Jensen’s remarks after the results are announced. “The AI revolution begins with Nvidia, and we believe the AI momentum is just beginning, with preparations underway,” he says.