Nvidia’s Record Profit Surge in the AI Sector

Nvidia is at the forefront of the AI transformation, achieving a remarkable profit of $22.09 billion in the fourth quarter of 2025, completing a year of exceptional financial success. Throughout the year, the company generated $14.8 billion in the first quarter, $16.6 billion in the second, and $19.3 billion in the third quarter, resulting in an average of $2,300 in profit every second over the past year.

The latest earnings report from the Santa Clara-based firm alleviated anxiety regarding a possible decline in AI investment, particularly following claims from Chinese AI startup DeepSeek, which asserted that it had developed cost-efficient AI models that could compete with their Western counterparts.

Jensen Huang, the CEO of Nvidia, expressed confidence in the company’s future, noting that AI is progressing rapidly and stating that the interest in Blackwell is exceptional.

The Blackwell AI supercomputers, which combine graphics chips, processors, and networking systems, accounted for an impressive $11 billion in revenue during Q4 alone. This represents nearly half of Nvidia’s overall data center revenue.

With the transition to the Blackwell chip architecture, Nvidia is pivoting from selling individual chips to providing comprehensive AI computing solutions. Huang highlighted that the large-scale production of Blackwell AI supercomputers has already yielded billions in sales in the inaugural quarter.

For the first quarter of 2026, Nvidia is projecting $43 billion in revenue, with a 2% margin of error, exceeding analysts’ predictions of $41.78 billion. This forecast has helped to rebuild investor trust, especially after a turbulent month in which Nvidia experienced a significant market cap loss of $593 billion, marking the largest one-day drop for any U.S. corporation.

Jacob Bourne, an analyst from eMarketer, remarked that, unlike prior quarters, there was increased skepticism surrounding this report due to concerns regarding DeepSeek’s competitive model and uncertainties about the Blackwell launch. However, the reported results have alleviated those concerns.

Despite the outstanding earnings, Nvidia’s gross margin for Q1 is anticipated to decrease to 71%, falling short of Wall Street’s projection of 72.2%. However, CFO Colette Kress reassured investors that margins are expected to bounce back to the mid-70% range as Blackwell production expands and costs diminish.

Furthermore, major technology firms continue to invest billions in AI infrastructure. Microsoft has set aside $80 billion for AI initiatives, while Meta Platforms is planning to allocate as much as $65 billion.

In another achievement, Kress confirmed that the United States government’s ‘Stargate’ data centre project will be utilising Nvidia’s Spectrum X ethernet for networking.

Impressive Financial Performance

• Adjusted EPS: 89 cents (compared to estimates of 84 cents)
• Q4 Revenue: $39.3 billion (versus the expected $38.04 billion)
• Data Centre Sales: $35.6 billion (+93% YoY, compared to expected $33.59 billion)