Nvidia, the world’s most valuable company, has reported a significant increase in sales, defying fears that artificial intelligence (AI) may be overhyped. The chip giant’s revenue for the three months ending in July rose to $46.74 billion, a 56% increase year-over-year.
Profit for the quarter was $26.42 billion, a yearly rise of 59%. Nvidia’s latest earnings report has been seen as a barometer of the AI boom, which has lifted the US stock market to all-time highs.
Nvidia CEO Jensen Huang attributed the company’s success to the growing demand for AI technology. “The AI race is on, and Blackwell is the platform at its centre,” Huang said, referring to Nvidia’s latest platform using its most advanced chips.
Production of Blackwell Ultra, Nvidia’s latest platform, is ramping up “at full speed,” and demand for the company’s products is “extraordinary.”
Looking ahead, Nvidia predicted revenue of $54 billion, plus or minus 2%, for the July-September quarter, which would be slightly above market expectations.
Despite the robust results, Nvidia’s stock price fell more than 3% in after-hours trading, an indication of the sky-high expectations attached to the chipmaker, which is valued at more than $4.4 trillion.
Nvidia’s sales notably did not include any shipments to China, whose market is subject to US government export controls intended to blunt Beijing’s ability to develop AI.
US President Donald Trump’s administration earlier lifted a ban on sales of Nvidia’s H20 chip, which was designed specifically for the Chinese market, following concerted lobbying by Huang.
As part of its agreement with the Trump administration, Nvidia agreed to pay the US government 15% of revenues from chip sales in China. The lifting of the ban on the H20 raises the possibility that Nvidia could have potentially enormous untapped sales potential in the world’s second-largest economy.
However, its prospects have been complicated by a recent directive by Beijing urging local firms against doing business with the company.
“Just imagine what will happen to this stock if the China business even comes half back to life,” The Kobeissi Letter, a newsletter following capital markets, said. “Jensen Huang will undoubtedly be working overtime on the China situation. The AI Revolution is in full swing.”
Nvidia’s revenue has grown at breakneck speed over the past two years, fueled by explosive demand for its AI technology. The company posted triple-digit revenue growth for five straight quarters between mid-2023 and 2024.
Since the start of 2023, the price of Nvidia shares has multiplied more than 11 times over, with the stock up more than 30% so far this year.
The firm’s stellar performance, underpinned by multibillion-dollar AI investments by tech giants including Microsoft, Meta, and Amazon, has stoked discussion about whether AI could be in a bubble.
In an interview with The Verge earlier this month, OpenAI CEO Sam Altman, who oversaw the release of the groundbreaking AI model ChatGPT, said he believed that investors were “overexcited” about the technology.
Despite these concerns, Nvidia’s latest earnings report suggests that demand for AI technology remains strong, and the company’s future prospects look bright. As the AI industry continues to evolve and grow, Nvidia is well-positioned to remain a key player in the market.