Nvidia's Record Revenue: AI Demand Soars Amidst DeepSeek Challenge

Nvidia (NVDA) reported record fourth-quarter revenue of $39.3 billion, up 78% from a year ago. The chipmaker's earnings beat Wall Street expectations with diluted earnings per share of $0.89, higher than analyst estimates of $0.84. This marks Nvidia's fourth consecutive quarter of beating earnings forecasts, demonstrating the company's resilience in the face of recent market turbulence.

The data center unit, Nvidia's largest business segment, was the main driver of growth. Revenue from this division reached $35.6 billion, climbing 16% from the previous quarter and nearly doubling year-over-year. CEO Jensen Huang highlighted the strong demand for the company's Blackwell AI chips, stating that "Nvidia is scaling AI computing at an unprecedented pace." Huang added that "demand for Blackwell is extraordinary as businesses seek greater AI reasoning and processing capabilities."

For the full fiscal year, Nvidia's revenue more than doubled to $130.5 billion. Net income surged 145% to $72.9 billion, showcasing the company's strong position in the AI market. Looking ahead, nvidia expects revenue of $43 billion in the first quarter of fiscal 2026, with a gross margin projected at 70.6% on a GAAP basis and 71.0% on a non-GAAP basis.

This earnings report was closely watched due to the recent emergence of China's DeepSeek AI, which introduced an AI model that matched or exceeded many U.S.-made models while requiring less computing power. Initially, this news caused Nvidia's stock to plunge, losing $600 billion in market value in a single day. However, Huang addressed these concerns during the earnings call, stating that DeepSeek has actually increased enthusiasm for Blackwell because reasoning models require 100 times more computing power. He emphasized that all signs point to increased demand for AI infrastructure in the "near-term, midterm, and longterm."

Analysts have noted that while competitors are making progress, the most advanced AI models still require the kind of computing resources that Nvidia provides. Jacob Bourne, a technology analyst at eMarketer, stated that "Blackwell generating 'billions in sales' validates Nvidia's top position." Some analysts have pointed out that market reactions have been somewhat muted due to high growth expectations