Nvidia experienced a massive surge in both profit and revenue during the fourth quarter, fueled by the ongoing demand for its advanced Blackwell chips, which are central to the operation of artificial intelligence systems. The report, released Wednesday, highlighted the company’s robust performance in a market increasingly defined by AI.
For the three months that ended on January 26, the Santa Clara, California-based tech giant announced a revenue of $39.3 billion. This figure represents a 12% increase compared to the previous quarter and a substantial 78% growth year-over-year. When adjusted for one-time items, Nvidia’s earnings came to 89 cents per share.
“Demand for Blackwell is amazing as reasoning AI adds another scaling law — increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter,” said Nvidia Founder Jensen Huang in a statement, emphasizing the company’s positive trajectory.
Wall Street’s expectations were exceeded by Wednesday’s earnings report. Analysts had predicted adjusted earnings of 85 cents per share on a revenue of $38.1 billion, according to FactSet. The fourth-quarter earnings results mark the first financial data released since the Chinese company DeepSeek claimed to have created a large language model capable of competing with ChatGPT and other leading U.S. rivals, while also being more cost-effective in utilizing Nvidia chips for training its system on vast datasets.
The announcement regarding DeepSeek briefly caused a $595 billion drop in Nvidia’s market value. However, Nvidia released a statement recognizing DeepSeek’s achievements, referring to it as “an excellent AI advancement.” The company highlighted the use of “widely-available models and compute that is fully export control compliant.”
Nvidia, a key player in the AI boom, has become the second-largest company on Wall Street, with a valuation exceeding $3 trillion. The company’s performance significantly influences the S&P 500 and other market indexes. Its impact is second only to Apple. The growth of Nvidia and other firms in the AI sector has been a major catalyst for the S&P 500’s recent record-breaking climbs.
The market’s upward trend, despite concerns about persistent inflation and potential economic pressures, has been significantly aided by the surge in profits from these AI-driven companies.
