Nvidia releases fourth quarter results and beats expectations

Nvidia, the artificial intelligence-focused tech giant, released its fourth-quarter results after the market closed on Wednesday, beating analysts' expectations on all fronts.

Outstanding financial results and Q1 outlook

Nvidia $NVDA reported earnings per share (EPS) of $0.89 on revenue of $39.3 billion in the quarter. Wall Street was expecting earnings per share of $0.84 on revenue of $38.2 billion. The company also said it expects first-quarter revenue of $43 billion plus or minus 2%, better than the $42.3 billion expected.

The biggest revenue came from data centers, where Nvidia reported revenue of $35.6 billion, which was better than the expected $34 billion. CEO Jensen Huang said the company was able to successfully ramp up mass production of Blackwell supercomputers, driving billions in revenue in the first quarter.

Issues with chips for the gaming segment and competition in AI

On the other hand, the gaming segment posted an 11% decline compared to last year due to supply issues with the latest gaming chips. However, Nvidia continues to be a leader in AI chips, and its products are highly regarded in Silicon Valley and elsewhere.

As big tech firms like Amazon, Google, Meta and Microsoft invest billions in building their own AI data centers, some of that money ends up directly with Nvidia. However, the stocks of these firms underperform in 2025, suggesting that competitors will not yet be able to fully match Nvidia's performance advantage.

Geopolitical threats and Nvidia's future

Nvidia is also facing the potential imposition of 25% tariffs on chips imported into the US, which could lead to price increases or reduced margins if it chooses to absorb the cost of the tariffs. The company works with TSMC to manufacture its processors, with most of those chips being made in Taiwan. In addition, President Trump is threatening to further restrict Nvidia's chip exports to China, which could affect its revenue from the region.

There are also concerns in the market that proprietary AI chips from companies such as Amazon, Google, Microsoft and Meta may threaten Nvidia's market share in the future. However, analysts, including Morgan Stanley's Joseph Moore, caution against being too pessimistic when discussing these alternatives. According to Moore, Nvidia still dominates thanks to its highly developed ecosystem support, and most of the competition will eventually return to its products.

Nvidia is therefore in a difficult situation where it has to face not only geopolitical risks but also growing competition in the AI world. Despite this, its position at the top of the industry remains strong, thanks to its constant innovation and the quality of its products.

Disclaimer: You will find a lot of inspiration on Bulios, but stock selection and portfolio construction is up to you, so always do a thorough analysis of your own.

Source: Yahoo Finance