Ahead of expectations Nvidia reported $39.3bn in revenue, beating analyst projections of $38.25bn.
The markets had been looking for any sign that demand for the company’s semiconductors was slipping – the demand for which has surged in the past few years driving the company’s valuation to well over $3trn. Nvidia’s financials gave no such signal.
DeepSeek’s AI model put the proverbial ‘cat among the pigeons’ a few weeks ago, demonstrating a level of performance that beat many US rivals, but achieved at a fraction of the cost.
At the time Nvidia’s valuation tumbled as it seemed to suggest that models did not necessarily need its ultra-expensive graphics processing unit (GPU). However, according to Nvidia CEO Jensen Huang, the appetite for Blackwell, the company’s top-of-the-line GPU, has remained strong achieving billions of dollars in sales.
However, while most analysts expect Nvidia to maintain its leading market position the market might just be turning.
Market analyst, TD Cowen, recently published findings that Microsoft, one of Nvidia’s biggest customers, was cancelling leases with private data centre operators bringing into question the sustainability of current investment in AI infrastructure. Microsoft had released figures showing planned investment of over $80bn.
If that investment is cut back, then Nvidia might see its sales take a hit.
For the moment, however, data centres – in which Nvidia controls more than 90% of the market for graphics processing units (GPUs) – generated revenues of $35.6bn for Nvidia across its final quarter.
The company also predicted it would bring in $43bn in revenue for the first quarter of fiscal year 2026.
According to Huang, the company expects demand for AI infrastructure to continue to grow as the technology continues to evolve pointing to Agentic AI, physical AI for robotics and sovereign AI as different regions build out their AI as key market drivers.
Interestingly, Nvidia’s quarterly figures are bigger than the company’s entire annual revenues from just two years ago. And, at least for now, the direction of travel seems to be only one way.
