NVIDIA Corporation (NASDAQ: NVDA) stock slid over 1% in after-hours trading Wednesday, despite reporting fourth-quarter results that outperformed Wall Street expectations and issuing robust revenue guidance for the current quarter. The chipmaker’s success fueled optimism about booming demand for its next-generation Blackwell AI chips.
For the three months ending January 26, NVIDIA reported adjusted earnings per share of $0.89, up from $0.81 in the same period a year ago. Revenue jumped 78% year-over-year to $39.3 billion. Analysts had expected earnings of $0.84 per share on revenue of $38.16 billion, but NVIDIA cleared both hurdles with room to spare.
The company’s data center segment, which drives the bulk of its revenue, brought in $35.6 billion—up 16% from the third quarter and beating estimates of $34.1 billion.
Looking ahead to the first quarter, NVIDIA (NASDAQ: NVDA) projected revenue of $43 billion, topping analyst forecasts of $42.05 billion. The company also anticipated a gross margin of 70.6% for the period, reflecting confidence in its profitability as it scales operations.
In a press release, CEO Jensen Huang said,
“We’ve successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter.”
The better-than-expected guidance also helped calm concerns about competition from Chinese AI firms like Deepseek. Recently, NVIDIA (NASDAQ: NVDA) stock faced pressure from investor worries over a potential drop in AI capital spending, fueled by the rise of low-cost Chinese models. Truist Securities noted ahead of the earnings that “the new models cost far less to train and use than those made by Western counterparts,” raising fears of a spending slowdown. However, the U.S.-based chipmaker’s results and outlook signaled resilience.
On the earnings call, CEO Jensen Huang doubled down on the growing demand for AI post-training, which he said requires significantly more computing power as reasoning models evolve. “Post-training could require hundreds, thousands, or perhaps millions more compute,” Huang explained. He highlighted that Blackwell was purpose-built for this phase, adding that customers are “enthusiastic and eagerly awaiting their Blackwell systems,” many of which are now coming online.
CFO Colette Kress addressed gross margins, noting they’ll hover in the low-70s due to heavy manufacturing investments during the Blackwell production ramp-up. Once production fully scales, she expects margins to recover to the mid-70s later this year.
Huang also shared a broader vision for AI’s future, pointing out that consumer AI is just the beginning. He predicted the next wave would include agentic AI, physical AI, and sovereign AI. “The next generation AI models would be even more thoughtful,” he said, underscoring NVIDIA’s role in pushing the boundaries of artificial intelligence.
Despite the dip in after-hours, NVIDIA’s standout Q4 performance and forward-looking guidance highlight its strength in the AI chip market, even as it navigates competitive challenges from low-cost rivals.
