NVIDIA's Fiscal Year 2025 Earnings Report: Strong Revenue Growth Driven by AI

NVIDIA's Fiscal Year 2025 Earnings Report: Strong Revenue Growth Driven by AINVIDIA announced its fiscal year 2025 fourth-quarter and full-year results on Wednesday, ending January 26, 2025, revealing continued strong growth and solidifying its leadership position in the artificial intelligence (AI) sector. The report not only exceeded analyst expectations but also demonstrated the significant impact of the AI boom on NVIDIA's business and its resilience in overcoming challenges

NVIDIA's Fiscal Year 2025 Earnings Report: Strong Revenue Growth Driven by AI

NVIDIA announced its fiscal year 2025 fourth-quarter and full-year results on Wednesday, ending January 26, 2025, revealing continued strong growth and solidifying its leadership position in the artificial intelligence (AI) sector. The report not only exceeded analyst expectations but also demonstrated the significant impact of the AI boom on NVIDIA's business and its resilience in overcoming challenges.

Strong Financial Performance: Revenue and Profit Growth

In fiscal year 2025's fourth quarter, NVIDIA's revenue reached $39.33 billion, a 78% year-over-year increase, surpassing the analyst average expectation of $38.05 billion. Net income, calculated under Generally Accepted Accounting Principles (GAAP), was $22.09 billion, a year-over-year increase of 80%. Adjusted earnings per share were $0.89, exceeding the analyst average expectation of $0.84. Full-year results were equally impressive: fiscal year 2025 revenue totaled $130.5 billion, a 114% increase year-over-year; GAAP net income was $72.88 billion, a 145% year-over-year increase; and adjusted earnings per share were $2.94, a 147% year-over-year increase. These figures clearly illustrate NVIDIA's robust growth over the past year.

Looking ahead, NVIDIA projects fiscal year 2026 first-quarter revenue of $43 billion, plus or minus 2%, again exceeding the analyst average expectation of $41.78 billion. This indicates the company's confidence in its future growth, anticipating sustained strong demand in the AI sector. It's noteworthy that despite the strong revenue growth, NVIDIA's fourth-quarter gross margin was 73%, a 3-percentage-point decrease year-over-year, potentially linked to challenges in managing cost pressures and technology upgrades. The company also announced a cash dividend of $0.01 per share payable on April 2, 2025, returning value to shareholders.

Data Center Business Continues to Lead, Driving Overall Growth

NVIDIA's strong performance is primarily attributed to the exceptional performance of its data center business. Fourth-quarter data center revenue reached $35.6 billion, a 93% year-over-year increase, significantly exceeding analyst expectations of $33.65 billion; full-year revenue was a remarkable $115.2 billion, a 142% year-over-year increase. The data center business now accounts for 91% of NVIDIA's total revenue, up from 83% in the same period last year and 60% in 2023, representing approximately tenfold growth in the past two years. This is largely due to massive global investment in AI infrastructure and NVIDIA's leading position in AI processors. NVIDIA's high-end AI chips have become the industry standard for building and running AI, creating consistently strong demand.

Other Business Segments Show Divergent Performance: Gaming Faces Challenges

Beyond the robust growth of the data center business, other segments showed varying performance. Gaming and professional visualization revenue in the fourth quarter was $2.5 billion, an 11% year-over-year decrease, below analyst expectations of $3.04 billion. While full-year revenue still grew by 9% to $11.4 billion, the growth rate for this segment significantly slowed. This may be attributed to the overall gaming market environment and the company's resource allocation towards high-end AI chips.

Professional visualization (including high-end graphics workstation chips) revenue in the fourth quarter was $511 million, a 10% year-over-year increase; full-year revenue was $1.9 billion, a 21% year-over-year increase, maintaining steady growth. Automotive and robotics (including automotive chips) revenue in the fourth quarter was $570 million, a 103% year-over-year increase; full-year revenue was $1.7 billion, a 55% year-over-year increase, demonstrating strong growth potential.

Blackwell Architecture Chips Lead the Future, Addressing Market Challenges

NVIDIA's founder and CEO, Jensen Huang, highlighted the strong demand for Blackwell chips in the earnings report, noting that inferential AI is generating a "second Moore's Law"increased training compute makes models smarter, while enhanced long-term inference compute makes answers more accurate. Both Blackwell and the previous-generation Hopper architecture chips belong to the data center business, with the mass production of Blackwell chips generating multi-billion dollar orders for the first quarter.

However, the market isn't without its challenges. Before the fourth-quarter earnings release, analysts expressed concerns about a potential slowdown in the short-term growth of NVIDIA's data center business, with supply chain bottlenecks and the transition to the Blackwell architecture impacting growth momentum. The new-generation architecture, while offering performance leaps, significantly increases the difficulty of chip manufacturing using advanced process technology. Furthermore, the launch of a powerful AI model by Chinese AI startup DeepSeek sparked market concerns, leading to significant fluctuations in NVIDIA's stock price.

Despite these challenges, NVIDIA remains confident in its future. Huang emphasized that AI is still in its early stages of fundamentally reshaping the economic system, stating that demand for Blackwell architecture chips is "quite robust." Major clients like Microsoft have maintained their existing capital expenditure plans, further supporting the continued AI investment boom.

Conclusion: Continued Growth Driven by AI

In summary, NVIDIA's fiscal year 2025 earnings report showcases the company's strong growth trajectory fueled by the AI wave. The continued leadership of the data center business and the strong demand for Blackwell architecture chips lay a solid foundation for future growth. While facing some challenges, NVIDIA, with its leading technology and market position in AI, is poised to maintain strong growth and lead the development of AI technology. The strong performance of the company's stock reflects the market's confidence in its future. NVIDIA's success story further validates the profound impact of AI technology on the global economy. In the future, as AI technology continues to develop and application scenarios expand, NVIDIA, as a leading AI company, is expected to achieve even greater success in this field. Simultaneously, the company needs to proactively address market challenges and continuously innovate to maintain its leading position.