Unprecedented Nvidia Sales Soar in Q4 Driven by Explosive Demand for AI Chips

LOS ANGELES (AP) — Nvidia is experiencing tremendous growth, reporting a significant increase in profit and sales in the fourth quarter. This surge is driven by a growing demand for its Blackwell chips, essential for artificial intelligence systems, and it’s pushing the company’s stock upwards.

For the three months ending January 26, Nvidia, based in Santa Clara, California, earned $39.3 billion in revenue. This is a 12% rise from the last quarter and an impressive 78% jump from the same time last year. After adjustments, the company made 89 cents per share.

Jensen Huang, Nvidia’s founder, expressed his excitement about Blackwell’s demand. He noted that as AI technology evolves, it requires more computing power. More compute means smarter models and better responses.

Nvidia has greatly increased Blackwell AI supercomputer production, leading to billions in sales quickly. Huang believes AI is moving fast, with the potential to transform major industries as new forms of AI are developed.

The recent earnings report surpassed Wall Street expectations. Analysts predicted adjusted earnings of 85 cents per share on $38.1 billion revenue, but Nvidia exceeded those figures with a net income of $22.06 billion, well above the expected $19.57 billion. Looking ahead, Nvidia expects revenue to reach around $43 billion in the first quarter of fiscal 2026.

A big part of this growth comes from data center sales, which are crucial to Nvidia’s earnings. These revenues hit $35.6 billion in the fourth quarter, a staggering 93% increase year-over-year.

This momentum in the data center market comes as President Donald Trump promotes a venture to invest up to $500 billion in AI-related infrastructure. This project, called Stargate, will see the construction of new data centers and energy facilities. Nvidia is a partner in this initiative.

Nvidia’s CFO, Colette Kress, mentioned that the sales of Blackwell products exceeded expectations, bringing in $11 billion in the fourth quarter alone — the fastest ramp-up in the company’s history. A large portion of these sales came from big cloud service providers, which made up about half of their data center revenue.

As a leading player in the AI market, Nvidia is now the second-largest company on Wall Street, valued at over $3 trillion. Its stock has become an important factor for the S&P 500, second only to Apple. Just two years ago, the company’s market value was below $600 billion.

Nvidia’s success reflects the broader rise of the S&P 500, which has recently hit new highs, driven in part by profits in the AI sector, even amid concerns about inflation and the potential effects of tariffs.

Regarding tariffs, Kress noted that uncertainties remain until Nvidia understands the current administration’s plans better. The company is poised to comply with any export controls or tariff regulations.

This earnings report is the first since Chinese company DeepSeek announced it had created a large language model that could compete with AI tools like ChatGPT. DeepSeek claims it can train its model using Nvidia chips more cost-effectively. This news briefly affected Nvidia’s market value, leading to a loss of $595 billion. However, Nvidia praised DeepSeek’s innovation, emphasizing that it complies with export controls.

Huang described DeepSeek’s R1 model as an exciting advancement, noting that many developers are using techniques derived from it to enhance their AI models.

Looking to the future, Huang mentioned that the next phase of AI will involve new forms, such as agentic AI for businesses and robotics. He believes Nvidia is at the forefront of these developments.