Nvidia exceeds revenue expectations due to AI chip demand

US chip-making giant Nvidia said it made a profit of $19 billion on record-high revenue in the latest quarter as demand for artificial intelligence (AI) hardware continues.
Nvidia reported quarterly sales of $35.1 billion, about $2 billion more than market expectations, AFP reported.
"The age of artificial intelligence is in full swing, driving the global shift to Nvidia computing," said founder and CEO Jensen Huang.
"AI is transforming every industry, company and country."
Huang said Nvidia's long-awaited Blackwell processing platform is in full production and the company sees "incredible demand" for the new offering alongside the current-generation Hopper processors.
"Enterprises are deploying agent-based artificial intelligence to revolutionize workflows," Huang said.
"Investment in industrial robotics is growing with breakthroughs in physical AI, and countries have realized the importance of developing their national AI and infrastructure."
Earlier this month, Nvidia overtook Apple to become the world's highest valued company as the artificial intelligence boom continues to excite Wall Street.
Following the quarterly report, Nvidia's share price fell nearly two percent in after-hours trading to $143.24.
Investors may have been troubled by the company's announcement that its margin, the amount it earns from processors, is expected to shrink.
"Despite Nvidia's technology leadership through CUDA and its first-mover advantage in AI infrastructure, there is little room for execution missteps in 2025," Emarketer analyst Jacob Bourne pointed out.
"Especially given the uncertainty around Blackwell deployments and growing competition from both AMD and key customers' internal chip development efforts," he added.
The market is also likely weighing geopolitical factors, such as the potential for trade turmoil with China following Donald Trump's return to the White House in January.
Nvidia relies on TSMC in Taiwan for its coveted GPUs.
The world's biggest tech companies have invested tens of billions of dollars in Nvidia's powerful AI chips and software to launch their ChatGPT-style AI models.
Microsoft, Google, Meta, Tesla, and Amazon depend on Nvidia's technology to train generative AI models and run the heavy computational workloads required to deploy the new technology.
Before the latest earnings, Nvidia's share price had nearly tripled since the start of the year and has contributed to a third of the broader S&P 500 index's gains this year. | BGNES