Santa Clara, CA – February 28, 2025 – Nvidia (NASDAQ:NVDA) reported robust fourth-quarter earnings and issued a better-than-expected revenue forecast for the current quarter, yet its stock took an 8.5% tumble on Thursday, closing at $120.15. The drop, marking the company’s steepest one-day decline since late January, was attributed to profit-taking after years of significant gains and concerns over a near-term dip in gross margins tied to the ramp-up of its next-generation Blackwell AI chips.
For the quarter ending January 26, Nvidia posted adjusted earnings of $0.89 per share on revenue of $39.3 billion, a 78% surge from the $22.1 billion recorded a year earlier. The results exceeded Wall Street’s expectations, with analysts surveyed by Investing.com anticipating $0.84 per share and $38.16 billion in revenue. The company’s data center segment, its largest revenue driver, delivered $35.6 billion, up 16% from the prior quarter and ahead of the $34.1 billion forecast.
Looking ahead, Nvidia projected fiscal 2026 first-quarter revenue of $43 billion, plus or minus 2%, surpassing analyst estimates of $42.05 billion. However, the company flagged a dip in gross margins to 70.6% for the period, down from 75% in fiscal 2025, as it scales production for its Blackwell AI supercomputers. CFO Colette Kress assured investors that margins are expected to rebound to the mid-70s later in 2025 once production stabilizes.
“We’ve successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter,” Nvidia stated, underscoring strong early demand for the chips designed to power advanced AI post-training workloads.
CEO Jensen Huang emphasized the growing computational needs of AI, particularly in post-training phases that fuel reasoning models. “Next-generation AI models will be even more thoughtful,” Huang said during the earnings call, noting that post-training could demand “hundreds, thousands, or perhaps millions” more computing power. He expressed confidence in Blackwell’s role in meeting this demand, dismissing concerns about competition from low-cost Chinese AI models like DeepSeek, which had rattled investors in recent months.
Analysts had previously highlighted DeepSeek’s cost-effective AI solutions as a potential threat, noting that their lower training and operational costs could erode Nvidia’s dominance. Thursday’s upbeat guidance, however, eased some of those fears, reinforcing optimism about Nvidia’s position in the AI hardware market.
Despite the positive outlook, the stock’s decline reflected investor caution. Huang’s vision for the future—spanning “agentic AI,” “physical AI,” and “sovereign AI”—captivated analysts, but not all were convinced of Nvidia’s uninterrupted growth. Summit Insights analyst Kinngai Chan downgraded the stock from Buy to Hold, citing a potential slowdown in growth by the second half of fiscal 2026. “While datacenter capex for AI training will continue to benefit Nvidia, the lower computing power needed for inference could negatively impact financial performance in the medium to long term,” Chan warned, pointing to an anticipated balance between GPU supply and industry demand.
Most analysts, however, remained bullish, buoyed by Nvidia’s strong fundamentals and leadership in AI innovation. The company’s ability to exceed expectations and navigate competitive pressures has kept it at the forefront of the AI revolution, even as Thursday’s sell-off highlighted the volatility of its meteoric rise.
As Nvidia doubles down on Blackwell and prepares for the next wave of AI, investors will be watching closely to see if the chipmaker can sustain its momentum amid shifting market dynamics.