Nvidia Reports Stratospheric Growth as Artificial Intelligence Boom Shows No Signs of Stopping

Nvidia announced record quarterly revenue on Wednesday as enterprise appetite for artificial intelligence explodes.

“The next industrial revolution has begun – companies and countries are working with Nvidia… to produce a new commodity: artificial intelligence,” said Jensen Huang, founder and CEO of Nvidia.

The company achieved revenue of $26 billion in the first quarter of fiscal 2025, up 18% from the fourth quarter and up 262% from a year earlier. Net income was $14.88 billion, up from $2 billion a year earlier.

The AI chipmaker, whose fortunes are being interpreted as a driver of the ongoing AI transformation, reported earnings per share of $5.98, up 21% from the prior quarter and 629% from a year ago. According to CNBC, investors expected revenue of $24.65 billion and earnings per share of $5.59. The company also announced it would split its shares, which are currently valued at $962 on June 7, 10 for one.

Investors expected another blockbuster set of financial results, but they also wanted to see that big tech spending on Nvidia chips would be as impressive as they predicted. And that was it.

“Nvidia is once again defying gravity as artificial intelligence companies around the world continue to depend on its chips, networking hardware and software ecosystem,” said Jacob Bourne, an analyst at eMarketer.

Bourne said the tech giants’ public praise of Nvidia is a “clear signal of its dominance” and that they want to reduce their dependence on the company “but realize they are not there yet.”

Tech giants Amazon, Google, Meta and Microsoft have signaled they plan to spend $200 billion this year on chips and data centers needed to train and run artificial intelligence systems. Apple said it will announce its artificial intelligence strategy next month. Nvidia is seen as a leading supplier of chips best suited to power artificial intelligence.

This year alone, the company has gained over $1.1 trillion in value. At the end of 2022, Nvidia was worth $359 billion. Now, in mid-2024, it is worth $2.33 trillion. That’s just $500 billion less than Apple and $900 billion less than Microsoft, the two most valuable U.S.-based companies.

The chipmaker’s earnings announcement “has become one of the most important events on the macro calendar,” according to Deutsche Bank strategist Henry Allen.

Analysts caution that no stock rises forever. Nvidia’s price-to-earnings (P/E) ratio is 79.95 to one. In contrast, Microsoft is 36 and Apple is 29. But Nvidia also earns almost $0.50 for every dollar of sales in net income.

Can it keep up with demand? Nvidia chips are now so desirable that they are delivered in armored cars. The company’s shares fell 5% on Tuesday after Amazon, a major customer, told the Financial Times it was waiting for orders for Nvidia’s new Blackwell superchip.

There is also the issue of China. Due to the Biden administration’s attacks on Chinese-made electric vehicles, the administration has refused to allow the company to sell high-end semiconductors in China.

Dan Ives of Wedbush Securities says investors will listen closely to artificial intelligence “godfather” Jensen when he speaks after the earnings announcement. “The AI revolution is starting with Nvidia, and we think the AI party is just getting started, making popcorn,” he says.