Nvidia Posts Record Quarterly Revenue, Stock Tumbles 5.5%

Nvidia, the world's most valuable company by market capitalization, reported record quarterly revenue but saw its shares plunge as Wall Street grew increasingly skeptical about the sustainability of AI investment spending.

The chipmaker announced fiscal fourth-quarter revenue of $68.13 billion, up 73% year-over-year and exceeding analyst estimates of $66.2 billion compiled by LSEG. Data center sales accounted for $62.3 billion, or 91.5% of total revenue. Adjusted earnings per share came in at $1.62, beating the $1.53 consensus estimate.

Annual revenue reached a record $215.9 billion, up 65% from the previous year. The company projected first-quarter revenue of $78 billion, surpassing Wall Street's $72.6 billion forecast.

"Computing demand is growing exponentially and the inflection point for agentic AI has arrived," CEO Jensen Huang said during the earnings call. "Grace Blackwell is currently the leader in inference, and Vera Rubin will further expand this dominance."

Despite the strong results, shares fell 5.46% the following day, dragging down the broader technology sector. Apple, Amazon, Alphabet, Broadcom, Tesla, and Micron all declined. The Nasdaq Composite dropped 1.18% while the Philadelphia Semiconductor Index fell 3.19%.

The muted market response reflects concerns that Nvidia's growth depends heavily on massive capital expenditure plans by hyperscalers. Amazon, Google, Microsoft, and Meta have announced combined 2024 capex plans exceeding $600 billion—figures that have sparked worries about overinvestment.

This marks Nvidia's 11th consecutive quarter of record revenue. The stock has declined 0.9% year-to-date.

CFO Colette Kress noted the company received U.S. government approval for limited H200 shipments to Chinese customers but has yet to generate revenue from those sales. "We don't know if imports to China will be permitted," she said.

Huang expressed optimism about the company's relationship with OpenAI, stating a contract signing was "imminent." He also addressed concerns that AI could disrupt software companies' business models, calling such fears "a market misjudgment."