Nvidia's AI Chip Sales Surge 80%

Nvidia's revenues surged by 80% year-on-year, driven by an "amazing" demand for its AI-focused microchips. The chip-making giant reported revenues of $39.3 billion for the quarter, up 12% from the previous quarter and 78% from the same quarter a year ago. This significant growth was fueled by the strong performance of its data center revenue, which accounted for over 90% of the firm's total revenues and increased by 93% from a year ago.

Nvidia's founder and CEO, Jensen Huang, attributed the earnings uptick to the "amazing" demand for the company's microchip Blackwell, designed for AI, machine learning, and high-performance computing. He also noted that AI is advancing rapidly, with agentic AI and physical AI poised to revolutionize major industries.

Despite the impressive earnings, Nvidia's share price closed trading on Feb. 26 up 3.67% to $131.28, but it fell 1.49% after hours to $129.32. Although the stock is still down from its all-time high set in November, the recent decline in valuation is considered a "bullish development" for Bitcoin, according to a Jan. 27 report by research firm 10x Research. The firm suggested that reduced spending on AI could help ease inflation, potentially leading to more favorable monetary policy from the US Federal Reserve.

Nvidia's strong performance in the AI chip market comes as other US firms are also ramping up their AI expansion. In September, Microsoft announced the establishment of two AI centers in Abu Dhabi, which was among the significant AI investments throughout 2024. Additionally, Bitcoin mining companies have been diversifying their income streams to include AI, converting some of their crypto mining operations to help run compute-intensive large language models.

In August, asset manager VanEck estimated that if publicly traded Bitcoin mining companies shifted 20% of their energy capacity to AI and high-performance computing by 2027, they could increase additional yearly profits by $13.9 billion over 13 years. This trend suggests that the AI chip market is not only driving Nvidia's growth but also transforming the broader tech landscape.