Nvidia on Wednesday evening delivered a better-than-expected fiscal 2025 fourth quarter driven by a $2 billion revenue beat on data center sales. Forward guidance also exceeded estimates. Despite the enormous anticipation of the results, shares dropped 1.5% in after-hours trading. But given the volatile nature of the stock, a bigger move — in either direction — could materialize come Thursday’s opening bell. Revenue grew 78% year over year to $39.33 billion, outpacing the $38.05 billion the Street was looking for, according to estimates compiled by data provider LSEG. Adjusted earnings per share increased to 89 cents, exceeding the consensus estimate of 84 cents, LSEG data showed. Why we own it Nvidia’s high-performance graphic processing units (GPUs) are the key driver behind the AI revolution, powering the accelerated data centers being rapidly built around the world. But Nvidia is more than just a hardware story. Through its Nvidia AI Enterprise service, Nvidia is building out its software business. Competitors : Advanced Micro Devices and Intel Most recent buy : Aug 31, 2022 Initiation : March 2019 Bottom line The magnitude of Nvidia’s beats and raises have come down in size over the past year, which could explain why the stock has been about flat from where it traded last June. However, any other company would gladly take Nvidia’s latest $1 billion revenue beat and $1 billion beat on the guide. While the impact of claims of a more efficient artificial intelligence model from Chinese startup DeepSeek muddied the waters nearly one month ago to the day, we just learned from Nvidia and its big tech clients in recent weeks that the AI spending cycle is far from over due to scaling laws and rapid advancements in the technology. We also know Nvidia has the best hardware and software platform in the market with its new Blackwell chip system, which CEO Jensen Huang described as “designed” for this moment due to its ability to transition from AI pre-training, post-training, and test-time scaling applications. It also provides customers with the lowest total cost of ownership and higher return on investment. NVDA 1Y mountain Nvidia 1 year As long as the secular trend continues with no deviations in spending patterns from the larger cloud service providers, which make up about half of Nvidia’s data center revenue, then we remain “own it, don’t trade it” on a company that has shown time and time again that it’s a once-in-generation enterprise run by a true visionary. As always, however, “own it, don’t trade it” does not prevent us from periodically taking profits in acknowledgment of risks like we did at the start of 2025 . For now, we’re reiterating our 2 rating and $165-per-share price target. The stock remains below its Jan. 24 close around $142, the Friday before all the DeepSeek turmoil started. Commentary Coming into earnings , we wanted to hear Jensen and company’s thoughts on four different topics: the Hopper to Blackwell transition,…
Read More: Nvidia’s beat and raise eases investors’ concerns about 4 things nagging
