Three Reasons Nvidia's Quarter Was Stronger Than Sellers Think

Nvidia's (NVDA) recent quarterly results have sparked a mixed reaction from investors, with shares bouncing between gains and losses. However, there are several bullish aspects of the company's performance that sellers may be overlooking. Here are three key reasons why Nvidia's quarter was stronger than it appears:

1. Strong Data Center Sales: Nvidia's data center sales were a core part of its revenue growth, with fourth-quarter revenue reaching $35.6 billion, up 93% from one year ago. This growth comes as President Donald Trump has announced a joint venture investing up to $500 billion for infrastructure tied to AI through the Stargate Project, in which Nvidia is a partner. The company's strong data center sales are driven by growing demand for AI inference and training, as well as investments by cloud service providers in AI infrastructure.
2. Blackwell Architecture Adoption: Nvidia's Blackwell architecture, which powers its AI chips, has seen rapid adoption, with $11 billion in sales in the fourth quarter of fiscal 2025. This growth is driven by demand from large cloud service providers and AI startups like DeepSeek. The company's CFO, Colette Kress, stated that Blackwell sales were led by large cloud service providers, which represented approximately 50% of Nvidia's data center revenue. This rapid adoption of Nvidia's Blackwell architecture indicates strong demand for the company's AI chips and a solid foundation for future growth.
3. DeepSeek Partnership and Validation: Nvidia's partnership with Chinese startup DeepSeek has been a significant factor in the company's quarterly performance. DeepSeek's development of a large language model that can compete with U.S. rivals like ChatGPT has raised concerns about Big Tech's spending on AI infrastructure. However, Nvidia has commended DeepSeek's work as an "excellent AI advancement" that leverages "widely-available models and compute that is fully export control compliant." CEO Jensen Huang stated that DeepSeek R1 has "ignited global enthusiasm" and that nearly every AI developer is applying R1 or chain of thought and reinforcement learning techniques like R1 to scale their models' performance. This validation of Nvidia's technology by a prominent AI startup like DeepSeek can attract more AI developers and customers to Nvidia's platform, further boosting its market share.




In conclusion, Nvidia's recent quarterly results demonstrate strong fundamentals, driven by robust data center sales, rapid adoption of its Blackwell architecture, and validation from AI startups like DeepSeek. Despite the mixed market reaction, these bullish aspects suggest that Nvidia's long-term prospects remain positive. Investors should consider these factors when evaluating the company's stock performance and potential for future growth.