Nvidia’s latest quarterly earnings report revealed impressive results, though market reaction remained muted despite the semiconductor giant beating most analyst expectations. The company reported fourth quarter adjusted earnings per share of 89 cents, surpassing the estimated 84 cents, while revenue climbed 78% year-over-year to $39.33 billion, exceeding projections of $38.25 billion.
The company’s data center segment continued its remarkable
performance, generating $35.6 billion in revenue, marking a 93% increase from the previous year. Compute revenue saw substantial growth, reaching $32.56 billion, while networking revenue experienced a decline of 9.2% to $3.02 billion. Gaming division revenues also saw a decrease, dropping 14% to $2.5 billion.
In a significant development, Nvidia announced successful sales of its new Blackwell architecture chips, achieving “billions” in revenue during the fourth quarter of fiscal 2025. The company described this as the fastest product launch in its history, with large cloud service providers accounting for approximately half of data center revenue.
Looking ahead, Nvidia provided guidance for first-quarter revenue of $43 billion, with a 2% margin of variation, slightly surpassing Wall Street consensus of $42.3 billion. However, this projection suggests a moderating growth trajectory compared to previous quarters’ explosive expansion.
Some areas of concern emerged from the report, particularly in networking revenue, which declined both year-over-year and
sequentially. Nvidia attributed this decrease to product transition phases. Additionally, the company’s gross margin forecast of 71% for the current quarter fell slightly below analyst consensus, though management maintains this is temporary due to new product introduction costs.
The company highlighted its success in scaling up Blackwell AI supercomputer production, emphasizing the technology’s potential impact on various industries through advances in agentic AI and physical AI applications. Large cloud service providers remained crucial customers, driving significant portions of data center revenue.
Despite these largely positive results, investor response was surprisingly subdued. The stock showed minimal movement in after-hours trading, even though options markets had priced in potential movement of up to 10% in either direction – the largest anticipated swing since 2022.
The muted market reaction comes during a period of increased caution in tech sector sentiment, with Nvidia shares having experienced declines since their previous earnings report – a pattern not seen since 2022. This marks a shift from the company’s recent history of triggering significant market responses to earnings releases.
Financial metrics remained strong across other areas, with adjusted operating income reaching $25.52 billion, up 73% year-over-year, and free cash flow growing 38% to $15.52 billion. Research and development expenses increased 51% to $3.71 billion, though staying below analyst estimates.
The company’s transition to new products, particularly the Blackwell platform, appears successful despite initial concerns about potential delays or customer hesitation during the transition period. Nvidia emphasized that the rapid adoption of their latest technology demonstrates continued strong demand for AI computing solutions, even as the pace of growth shows signs of normalization from previous quarters’ extraordinary levels.