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Nvidia delivered solid results on Wednesday as the $4tn tech giant at the heart of the artificial intelligence boom signalled resilient growth, with markets jittery about whether the momentum around the technology can continue.
The company reported revenue of $46.7bn for the quarter to July 28, up 56 per cent year on year and slightly above consensus estimates of $46.5bn, according to Visible Alpha.
Nvidia said it expected $54bn in sales for the current quarter, plus or minus 2 per cent, compared with expectations of $53.8bn.
It did not factor any China sales into its outlook, something some investors had hoped to see after it reached a deal with the Trump administration to resume sales to the country.
Nvidia’s role in designing the advanced chips that are used to develop and run AI models such as ChatGPT has propelled it to become the world’s most valuable group by market capitalisation and made it a bellwether for the AI boom.
The shares were down about 3 per cent in after-hours trading on Wednesday.
Data centre revenue, which relates to Nvidia’s AI chip business, was $41.1bn, slightly under consensus estimates of $41.4bn. The slip was offset by better than expected gaming revenues offset this.
Its stock has surged 35 per cent this year as of Wednesday’s close, helping drive gains in the broader market. But it has proved sensitive to any negative news.
Nvidia shares took a hit last week during a widespread sell-off in companies linked to AI, after a negative report on its practical applications and comments by OpenAI chief executive Sam Altman about investors overhyping the technology.
Net income jumped 59 per cent from last year to $26.4bn, against forecasts of $23.5bn. Earnings per share were $1.08, while adjusted gross margin was 72.7 per cent, slightly above consensus estimates of 72.3 per cent.
Nvidia did not give expectations of future revenue from chip sales in China, which have been disrupted by US President Donald Trump’s volatile trade policy towards Beijing.
The state of the company’s China business is a crucial short-term question for investors.
New export controls imposed temporarily earlier this year by the Trump administration on H20 chips that Nvidia designed for the Chinese market wiped out its sales. The company earlier this month cut a deal with the government to pay a 15 per cent cut in return for a licence to resume sales in China.
But Beijing responded with a political backlash against the chip, leaving analysts with little visibility into how much Nvidia will sell this year as wider trade negotiations between Washington and Beijing drag on.
The company said that despite no revenue from China during the quarter due to new US export controls, it had managed to sell $650mn of its China-specific H20 chips to a customer outside of the country.
The rollout of the company’s latest Blackwell platform, Blackwell Ultra, was “ramping at full speed, and demand is extraordinary”, said Nvidia chief executive Jensen Huang.
The deployment of the new hardware involves more complex infrastructure to build its chips into ever-larger racks of interconnected chips, and hit technical snags early in its development.
Nvidia is working on a new chip based on Blackwell for the China market, that is more powerful than the H20 but still not as capable as its most advanced US chips. Trump has indicated that he is open to a similar revenue deal.
