NVIDIA Corp. has once again delivered a stellar quarterly performance, buoyed by the relentless demand for artificial intelligence chips and a remarkable surge in data center revenue. Closing at $223.47, Nvidia’s stock rose by 1.30%, reflecting investor confidence following the announcement of its earnings.
In the fiscal first quarter, Nvidia reported adjusted earnings of $1.87 per share, surpassing the analyst consensus of $1.76 per share. Revenue skyrocketed by 85% year-over-year to reach $81.62 billion, comfortably exceeding forecasts of $78.86 billion.
The company’s total revenue for the quarter was recorded at $58.32 billion, a significant increase from $18.78 billion a year prior. This remarkable growth underscores the surging demand for AI infrastructure, particularly among cloud providers and enterprises developing extensive AI systems.
Data Center Revenue Leads Nvidia Results
Nvidia’s data center segment emerged as the primary catalyst for this growth, generating $75.2 billion in sales, a staggering 92% increase from the same quarter last year. This segment now constitutes over 90% of Nvidia’s total sales, marking a critical shift in the company’s revenue model.
Recently, Nvidia restructured its revenue reporting to distinguish between data center and edge computing categories. CEO Jensen Huang emphasized that this change provides clearer insights into the company’s operations, as each sector employs distinct systems, software, and sales channels.
According to Chief Financial Officer Colette Kress, hyperscale cloud providers contributed over $38 billion to the data center sales, while AI clouds and enterprise customers accounted for an additional $37 billion. This latter segment, referred to as ACIE, has tripled in size compared to the previous year.
Kress noted a growing demand for AI infrastructure, as companies expand their data center capabilities for model training and inference. The rental prices for Nvidia’s H100 GPUs have surged by 20% this year, with A100 cloud pricing also climbing nearly 15%.
Vera Rubin and CPU Business Draw Attention
Nvidia also provided insights into its next-generation Vera Rubin rack-scale AI system, which is already seeing robust early demand. Huang stated that Vera Rubin is expected to outperform the existing Grace Blackwell platform.
This cutting-edge system incorporates 72 Rubin GPUs and 36 Vera central processing units, promising a tenfold improvement in performance per watt compared to its predecessor.
Furthermore, Nvidia is venturing beyond GPUs into the CPU market. Kress revealed that the Vera CPUs represent a new market opportunity, with significant collaborations underway with major hyperscale and system manufacturers. The company anticipates CPU sales to reach approximately $20 billion by the end of the year.
Nvidia has traditionally centered its AI initiatives around GPUs, which excel in parallel computing tasks crucial for training large language models. As demand for inference and agentic AI workloads expands, the company is strategically positioning its CPUs and other chips for a more extensive role in AI data centers.
Additionally, Nvidia discussed its LPX rack system, which features custom Groq language processing units. Huang noted that while LPX is designed for low latency and high token rates, its application may remain limited for the time being.
Stock Reaction and Shareholder Returns
Nvidia has projected around $91 billion in revenue for the current quarter, significantly above Wall Street’s expectation of $87.39 billion. This guidance, nearly $10 billion higher than Q1 revenue, reinforces the company’s outlook for sustained AI chip demand in the foreseeable future.
Despite the positive earnings report and optimistic guidance, Nvidia’s shares experienced little movement in after-hours trading. Analysts suggest that much of the anticipated performance had already been factored into the stock price prior to the earnings announcement.
The company’s market capitalization has soared since the commencement of the AI investment cycle, jumping from approximately $400 billion at the end of 2022 to over $5.4 trillion. Investors are keenly observing whether this demand will persist into 2027 and 2028, especially as competition intensifies from tech giants like Google, Amazon, AMD, and Intel.
In a significant move for shareholders, Nvidia announced an $80 billion stock buyback authorization and increased its quarterly cash dividend from one cent to 25 cents per share. This strategic return plan aligns with the company’s record sales from data center products and continued investment in AI infrastructure.
