Silicon Valley’s massive artificial intelligence spending spree may have rattled Wall Street, but chipmaker Nvidia continues to reap enormous rewards from sales to the world’s largest technology companies.
For the quarter ended in July, Nvidia’s profit more than doubled year-over-year to $59.69 billion, the company announced Wednesday. Revenue likewise surged over 100% to $96.22 billion. Just three years ago, Nvidia’s quarterly profit stood at $6.2 billion.
“AI has reached its inflection point,” Chief Executive Jensen Huang said in a statement.
Signaling that the AI boom retains substantial momentum, Nvidia forecast current-quarter revenue would jump 90% from a year earlier to $108 billion. The company expects roughly 70% growth next year despite being “supply-constrained,” Chief Financial Officer Colette Kress told analysts and investors.
“Although we will work to close the supply-demand gap, we expect supply to remain a bottleneck through at least January 2028,” Kress said.
Nvidia’s results and projections exceeded expectations. Wall Street analysts had projected quarterly profit of $50.94 billion on revenue of $91.96 billion, according to FactSet. For the current quarter, analysts predicted revenue of $103.77 billion. Nvidia shares rose as much as 4% in after-hours trading Wednesday.
Nvidia’s chips serve as the cornerstone of massive AI data centers, and demand for those processors has become a barometer for the AI boom. Other technology giants have been purchasing tens of billions of dollars worth of those chips, propelling Nvidia to become the world’s most valuable public company with a market capitalization of approximately $5 trillion.
More than a decade ago, Huang steered Nvidia — then primarily a maker of video game chips — toward developing software and semiconductors for building AI. Today, the Silicon Valley company controls an estimated 90% of the market for advanced semiconductors that power AI.
Over this year and next, Amazon, Google, Microsoft, and Meta are expected to spend $1.5 trillion building data centers, according to FactSet. Nvidia’s chips fill those facilities.
In the most recent quarter, Nvidia’s data center revenue climbed 117% to $89 billion — accounting for more than 90% of total sales.
Nvidia and Amazon on Wednesday announced an agreement to deploy two million additional Nvidia chips on Amazon’s cloud computing service. The companies will also construct data centers for the U.S. government, which could enable intelligence agencies to run upcoming advanced AI models from firms like OpenAI.
The race to build data centers has created a memory chip shortage affecting Nvidia itself. The company is “experiencing extreme pricing conditions in memory,” which will compress margins, Kress said. Nvidia also plans to raise prices in the quarter ending next April.
While Nvidia’s revenue from other sources, such as the automotive industry, remains “still pretty, pretty small,” those segments could eventually drive “some valuation expansion,” said David Wagner, head of equity at Aptus Capital Advisors.
“Data centers are going to be the driver for the near term,” he said. “While the others are growing quite substantially, it’s just not their time to shine yet.”
Nvidia is also pursuing expansion in China, which could yield billions in additional sales. The Trump administration has permitted Nvidia to sell its powerful H200 chip to China. However, Huang has had less success in Beijing, where the government has been slow to authorize Chinese companies to purchase Nvidia’s chips.
In the quarter ended in July, H200 shipments to customers based in China accounted for less than 1% of Nvidia’s data center revenue, Kress said.
Nvidia has also emerged as a primary financier of the AI boom. This month, the company agreed to commit up to $105 billion to back a data center in Pike County, Ohio, that OpenAI plans to lease. Nvidia and six major asset managers, private equity firms, and banks also announced an initiative to raise $500 billion in financing for Nvidia’s customers to purchase chips, data centers, and computing power.
These complex financing arrangements are leading some investors to question “whether to discount the growth rate and the size of the market” for AI chips like Nvidia’s, said Gil Luria, head of technology research at investment bank D.A. Davidson.
The question for investors, Luria said, is: “How big would the market be if Nvidia weren’t funding its customers?”
