Nvidia Earnings: Data Center Revenue Jumps 427% YoY as AI Demand Surges

Nvidia reported earnings that blew past estimates Wednesday, capping a year where the chipmaker has become the single largest beneficiary of the AI buildout. Revenue more than tripled to $22.1 billion in the fiscal fourth quarter, well above the $20.4 billion analysts had expected. Data center revenue alone hit $18.4 billion, up 427% from a year earlier and nearly five times the $3.6 billion the segment brought in during the same quarter two years ago.

The company also gave guidance that topped Wall Street forecasts. For the first quarter of fiscal 2025, Nvidia expects revenue of $24 billion, plus or minus 2%. The midpoint of $24 billion compares with the $22.2 billion consensus. CEO Jensen Huang called it a "tipping point" for accelerated computing and generative AI.

"Demand is surging across enterprises, consumer internet, automotive, and healthcare," Huang told analysts on the conference call. "The industry has started a new cycle."

The data center segment's growth was broad-based. Large cloud providers – Amazon, Microsoft, Google, Oracle – accounted for roughly half of data center revenue, but enterprise customers doubled their spending sequentially. Nvidia's H100 chips remain constrained, though supply improved through the quarter. Huang said the supply chain is executing "very well" and that Nvidia expects demand to outpace supply through the rest of fiscal 2025.

Gaming revenue, once the company's largest business, reached $2.9 billion, up 56% from a year ago but flat sequentially. Professional visualization revenue grew 105% to $463 million. Automotive and robotics revenue hit $281 million, up 21%.

Net income rose to $12.3 billion from $1.4 billion a year earlier. Adjusted earnings per share came in at $5.16 versus the $4.59 consensus. Gross margins widened to 76.7%, up from 63.3% a year ago, driven by the mix shift toward higher-margin data center chips.

The company's cash and equivalents now sit at $25.9 billion, up from $18.2 billion last quarter. Nvidia did not announce a new buyback authorization but said it continues to return capital through its existing $25 billion repurchase program.

Shares rose about 8% in after-hours trading following the report. The stock is up roughly 230% over the past 12 months and has a market capitalization above $1.7 trillion.

For investors weighing what comes next, the key question is sustainability. Nvidia's data center business has grown from a $3.6 billion run rate two years ago to an $18.4 billion quarter. At that pace, the segment alone would generate over $73 billion in annual revenue. The guidance implies the growth continues, if at a slightly slower pace. CFO Colette Kress said on the call that Nvidia expects "significant growth" in fiscal 2025, adding that the company is "supply-constrained" on H100s and the upcoming Blackwell platform.

The implicit challenge is whether customers will keep spending at this rate. Some analysts have begun asking whether hyperscale cloud capex can sustain its current trajectory. Microsoft, Amazon, and Google all reported increased AI spending in their most recent quarters, but none signaled a pullback. Amazon CEO Andy Jassy said this month that AI was a "once-in-a-lifetime opportunity" and called the current spend "justified."

Huang dismissed the notion of a bubble. "We are at the beginning of a 10-year cycle where every application can be transformed by AI," he said. "The demand is not just cloud providers. It is every company, every industry."

A second question is competition. AMD is ramping its MI300X AI chip and has secured a tier-one customer in Microsoft. Nvidia's own data center GPU lineup is set to transition this year from the H100 to the Blackwell B100, which Huang said would be the company's "most successful product launch ever." The shift carries risk – customers may pause orders ahead of the new architecture – but Nvidia's guidance suggests that is not yet material.

For now, the numbers speak plainly. Nvidia earned $12.3 billion in a single quarter, more than it earned in any full year before fiscal 2023. The data center business grew more than it did in the previous four quarters combined. And the forward guidance extends the run at least another three months. The question for investors is what multiple to put on earnings that are still accelerating.