Nvidia Shares Gain As Q1 FY25 Profits Jump 600%, Sales Surge 268%
The driving force behind Nvidia’s exceptional performance is its datacentre division, which brought in USD 22.6 billion in revenue last quarter
Nvidia has once again exceeded Wall Street expectations, posting record-breaking financial results that stress its dominant position in the AI market.
For the three months ending 30 April, the company reported earnings per share of USD 6.12 and sales of USD 26 billion. This represents a year-over-year (YoY) increase in profits by 628 per cent and revenues by 268 per cent.
The driving force behind Nvidia’s exceptional performance is its datacentre division, which brought in USD 22.6 billion in revenue last quarter. This marks an extraordinary 427 per cent increase from the previous year and is twenty times higher than the USD 1.1 billion the segment generated in 2020.
This success has led to Nvidia’s most profitable quarter ever, topping its previous record of USD 12.3 billion in net income and USD 22.1 billion in revenue from the prior quarter.
In a move to make its shares more accessible, Nvidia announced a 10-for-1 stock split to take effect on 7 June, reducing the share price from approximately USD 950 to USD 95 while maintaining the company’s overall valuation.
Following the release of the earnings report, Nvidia’s stock jumped by 4 per cent, reaching an all-time high during regular trading hours.
CEO Jensen Huang revealed that the forthcoming Blackwell AI chips are set to begin shipping in the current fiscal quarter, with production expected to increase in the subsequent quarter. Chief Financial Officer Colette Kress indicated that demand for these chips might outstrip supply well into the next year.
Looking ahead, Nvidia has forecasted second-quarter revenue of USD 28 billion, plus or minus 2 per cent, exceeding the analysts’ average expectation. The company reported a first-quarter adjusted gross margin of 78.9 per cent, higher than the estimated 77 per cent and anticipates a second-quarter adjusted gross margin of 75.5 per cent, plus or minus 50 basis points.
Nvidia's chips remain integral to AI data centers due to their superior performance and the proprietary CUDA software framework, which has proven difficult for competitors to replicate. Despite efforts by other companies to develop custom AI chips, analysts do not expect these initiatives to significantly diminish Nvidia’s market share.
For comparison, rival AMD recorded a first-quarter adjusted margin of 52 per cent, which shows Nvidia’s strong competitive edge in the industry.
