Nvidia's latest earnings announcement on Wednesday followed a now familiar script: After weeks of anticipation, Nvidia delivered results that beat expectations, CEO Jensen Huang reaffirmed his bullish outlook on AI, and Wall Street breathed a collective sigh of relief. And yet, despite another round of record-breaking results, investors were somehow left unimpressed. On Thursday morning, Nvidia's share price was down as much as 5 percent, as investors apparantly remain anxious about the long-term trajectory of AI.
On paper, there were no reasons to be down about Nvidia's latest result – in fact, the company’s growth accelerated once more and will pick up even more momentum in the current quarter, according to Nvidia’s outlook for the first quarter of its fiscal year 2027. In the three months ended January 25, Nvidia’s revenue grew 73 percent from the same period last year, reaching $68 billion and beating its own forecast of $65 billion as well as analyst expectations.
Once again, Nvidia's data center business was at the heart of the company's record-breaking quarter, as it saw a 75-percent increase in revenue versus a year ago and accounted for more than percent of total sales. Net income surged to $43 billion in the quarter, which is almost 10 times the company's full-year profit for fiscal 2023, the last year without the impact of AI. For the current quarter, Nvidia expects revenue of $78 billion, which would bring its growth rate to 77 percent – another increase from this quarter’s 73-percent growth.
In his comments accompanying the earnings release, Nvidia CEO Jensen Huang didn't temper his optimism, saying that computing demand was growing exponentially. “Enterprise adoption of agents is skyrocketing. Our customers are racing to invest in AI compute - the factories powering the AI industrial revolution and their future growth," Huang said. When asked whether he thinks that hyperscalers, i.e. large cloud providers like Amazon, Google and Microsoft can continue growing their CapEx like they currently do and thus continue to fuel Nvidia's growth, Huang was equally bullish: "We have now seen the inflection of agentic AI and the usefulness of agents across the world and enterprises everywhere. You are seeing incredible compute demand because of it. This new world of AI, compute is revenues. Without compute, there is no way to generate tokens. Without tokens, there is no way to grow revenues. So in this new world of AI, compute equals revenues."
