Nvidia Surges on Strong Q4 Earnings and AI Chip Demand

Nvidia (NASDAQ: NVDA) reported stellar Q4 earnings, surpassing estimates and boosting investor confidence in its next-generation AI Blackwell chips. The stock fluctuated after-hours but gained 1.8% as the earnings call unfolded.

For Q4 ending Jan. 26, Nvidia posted adjusted earnings per share of $0.89, up from $0.81 a year earlier, on revenue of $39.3 billion, a 78% year-over-year increase. Analysts had expected EPS of $0.84 and revenue of $38.16 billion.

The data center segment, driving most of Nvidia’s revenue, soared to $35.6 billion, up 16% from Q3, beating estimates of $34.1 billion. Looking ahead, Nvidia forecasts Q1 revenue of $43 billion, exceeding expectations of $42.05 billion, with a projected gross margin of 70.6%.

CEO Jensen Huang emphasized that post-training for AI models is fueling demand. He noted that next-gen AI will require significantly more computational power, making Blackwell a critical component. Customers are eagerly integrating Blackwell into their operations.

Despite concerns over rising competition from Chinese AI firms like Deepseek, Nvidia remains bullish. The company successfully ramped up Blackwell AI supercomputer production, achieving billions in sales within the first quarter.

CFO Colette Kress acknowledged that gross margins would remain in the low-70s during the Blackwell ramp due to manufacturing investments but are expected to rise to the mid-70s later this year.

Huang highlighted the future of AI beyond consumer applications, citing the rise of agentic AI, physical AI, and sovereign AI. With strong financials and continued innovation, Nvidia is well-positioned to maintain its leadership in the AI chip market.