Nvidia Releases Latest Financial Report: Huang Renxun’s Expectations and Development Path

Introduction:
The increasing demand for AI big models and computational power has significantly boosted Nvidia’s performance, with its stock price skyrocketing and revenue doubling.
Author: Fang Wensan
Image source: Internet


Nvidia releases Q1 FY2025 financial results
After the US stock market closed on May 22, Nvidia Corporation released its financial report for the first quarter of fiscal year 2025, which showed that the company achieved $26 billion in revenue, a year-on-year growth rate of 262% and a quarter-on-quarter growth of 18%, once again breaking the record for quarterly revenue.
At the same time, the company’s net profit reached $14.881 billion, a quarter-on-quarter increase of 21% and a year-on-year increase of 628%.
For four consecutive quarters, Nvidia has shown strong market performance, exceeding market expectations, and this quarter continues this positive momentum.
In addition, Nvidia also announced a stock split, which is scheduled to be implemented at a ratio of 1:10 on June 7. This move is expected to bring lucrative profit opportunities for investors, attracting widespread attention and discussion on Wall Street.
Goldman Sachs, Bernstein, Citigroup, Morgan Stanley, and Jefferies, and other well-known investment banks have raised their target stock prices for Nvidia.
According to estimates by Sequoia Capital in March, the industry has invested a large amount of capital into Nvidia, amounting to $50 billion, for training large-scale language models.
However, compared to this, the revenue of generative AI startups is only $3 billion, showing Nvidia’s significant advantage in the AI chip field.
IDC Asia Pacific Research Director Guo Junli has predicted that the AI chip market will exceed $65 billion by 2024.
Given Nvidia’s leading position in the market, the company is expected to fully benefit from the surge in demand.


Revenue Composition:
Nvidia’s revenue mainly comes from four major sectors: data centers, gaming, professional visualization, and automotive electronics.
Notably, benefiting from the continued prosperity of the AI server market, the data center business achieved significant growth in the quarter, with revenue reaching $22.6 billion, a quarter-on-quarter increase of 23% and a year-on-year increase of 427%, expanding the year-on-year growth rate compared to the previous quarter.
In addition, the share of this business in total revenue has increased from 83% in the previous quarter to 87%, demonstrating its core position in the company’s overall business.
Nvidia CFO Colette Kress pointed out in the financial report conference call that this growth is mainly due to the strong demand for the Hopper GPU computing platform in the market.
With the gradual delivery of the Hopper architecture computing products launched by Nvidia in 2022, data center computing product revenue reached $19.4 billion, a quarter-on-quarter increase of 29% and a year-on-year increase of 478%, demonstrating strong growth momentum.
In terms of networking products, although revenue declined quarter-on-quarter due to supply constraints, it still achieved $3.2 billion in revenue, a year-on-year increase of 242%. This indicates that Nvidia also has strong competitiveness and market potential in the networking product field.
In the automotive and robotics fields, Nvidia has also achieved remarkable results. In this quarter, revenue in this sector was $329 million, an increase of 17% compared to the previous quarter and 11% compared to the same period last year.
In addition, Nvidia announced partnerships with well-known companies such as BYD, NIO, GAC AION Hyper, and Nuro to provide power support for their next-generation consumer and commercial electric vehicle fleets.
At the same time, Nvidia announced that several partners are using its generative AI technology to transform the in-car experience, further expanding its application in the automotive and robotics fields.
Furthermore, Nvidia has launched a major update to the Project GR00T foundational model for humanoid robots and the Isaac robotics platform, demonstrating its innovative strength in the field of artificial intelligence and robotics.


Next-generation AI chips will continue to determine performance trends
At the financial report conference, Nvidia CEO Jensen Huang announced that the AI chips based on the Blackwell architecture have been successfully produced on a small scale, and it is expected to gradually deliver them to customers from the second quarter and achieve large-scale delivery in the third quarter.
He further pointed out that with the gradual market launch of the new products, data centers in the fourth quarter will be able to run on these advanced chips, bringing substantial revenue growth to the company.
Huang also emphasized that the current market demand for AI computing power remains strong, leading to a supply shortage. This also indicates that the previous generation Hopper architecture chips will continue to maintain strong demand growth.
It is reported that Nvidia has started the production process of the H200 and is expected to ship it in the upcoming second quarter.
It is worth mentioning that Huang personally delivered the first H200 system to the OpenAI team and provided strong support for the demonstration of its flagship model GPT-4o last week.
Compared to the previous product H100, the inference performance of H200 has significantly improved, almost reaching double that of the former.
In addition, Guo Mingchi, an analyst at TF International Securities, revealed that the development of Nvidia’s next-generation R series/R100 AI chips is progressing smoothly and is expected to be mass-produced in the fourth quarter of 2025. The R100 AI GPU is expected to officially debut in the market next year.
The release of Nvidia’s Blackwell series products coincides with the golden period of large-scale construction of AI infrastructure, indicating strong market demand.
According to Omdia Research statistics, in just last year (2023), major technology companies globally had shipped an astonishing 650,000 units of the H100, with Meta and Microsoft each purchasing more than 15,000 units of GPUs.
At the same time, major tech giants have explicitly stated in their latest financial conference calls that they plan to significantly increase their investments in AI infrastructure in the coming years.
This trend indicates that the GPU market will have a broader growth space.
As a leader in the high-end AI chip market, Nvidia will undoubtedly be one of the biggest beneficiaries of this wave of investment enthusiasm.


Token business creates new value for AI
Nvidia CEO Jensen Huang pointed out at the financial report interpretation meeting that a new industrial revolution has begun, centered around the mass production of a new commodity called Token.
As a concrete representation of artificial intelligence, Token has a high degree of reconfigurability and convertibility, and can flexibly present itself in various forms such as language, proteins, graphics, videos, and more.
Looking ahead to the next ten years, Token is expected to drive innovative products and services in multiple fields, significantly boosting industry productivity, and potentially creating a market value of up to $100 trillion.
This assertion has significant disruptive implications, signaling that we are entering a new economic era with Token as the core value carrier.
In this wave of the new industrial revolution, Nvidia, with its outstanding technical strength and innovation capabilities, has become an industry leader, leading the direction of industry development.
Nvidia founder and CEO Jensen Huang further emphasized in a statement that with the launch of the ultra-powerful AI chip Blackwell in the second half of the year, the company will usher in stronger growth momentum.
He said, “[A new round of industrial revolution has begun, and many companies and countries are working with Nvidia to promote the transformation of traditional data centers into the accelerated computing field and build a new type of data center – AI factories to mass-produce this new bulk commodity: artificial intelligence.]”


Achieving the “ceiling” of performance, expectations for the next stage of development
In this quarter, Nvidia’s revenue growth was only about 5% higher than the value predicted by Bloomberg analysis, far below the expected 26%.
At the same time, Nvidia expects its revenue for the second quarter to reach $28 billion, with a year-on-year growth rate ranging from 5% to 10% and a fluctuation range of 2%, which is significantly lower than market expectations.
Kress emphasized that compared to last year, computing revenue achieved a significant growth of more than 5 times, and network revenue also achieved a growth of more than 3 times.
In addition, thanks to the application of the CUDA algorithm, Nvidia has successfully increased the inference speed of large language models on the H100 by up to 3 times. In other words, this technological breakthrough has reduced the cost of providing services for large models to one-third of the original cost.
Nvidia’s financial report shows that cloud computing giants contributed about 45% of the revenue in the latest quarter’s data center revenue.
However, it is worth noting that Nvidia’s data center revenue share in the Chinese market has dropped significantly from the original 19% to about 5%.
In response to this, Jensen Huang solemnly promised that Nvidia will continue to do its best to provide quality services to customers in the Chinese market and strive to achieve the highest level.
It is worth noting that due to the impact of the upgraded export control policy by the United States, Nvidia’s revenue from Chinese customers in the data center business has significantly declined, from 19% in fiscal year 2023 to a mid-single-digit percentage (5%) in fiscal year 2024.
In the financial report conference, Jensen Huang admitted that due to technical restrictions, the Chinese data center business has been significantly reduced, but Nvidia will still make every effort to serve Chinese customers.


Regarding Nvidia’s outlook for the second quarter of fiscal year 2025, the company expects revenue to reach $28 billion, with a fluctuation range of plus or minus 2%, compared to the expected 7% to 8% growth in the first quarter.
At the same time, the company expects GAAP and non-GAAP gross margins to be 74.8% and 75.5%, respectively, with a fluctuation range of plus or minus 50 basis points.
The annual gross margin is expected to fluctuate within the mid-term range of 70%, indicating a possible decrease in gross margin and an increase in sales costs.
In terms of operating expenses, Nvidia expects GAAP and non-GAAP operating expenses to be approximately $4 billion and $2.8 billion, respectively.
The expected growth in operating expenses for the year will be maintained within the low 40% range.
In addition, the company expects GAAP and non-GAAP other income and expenses to be approximately $300 million, excluding gains and losses from non-affiliated investments.
As for the tax rate, Nvidia expects GAAP and non-GAAP tax rates to be 17%, with a fluctuation range of plus or minus 1%, and excluding the impact of any discrete items.


Conclusion:
Nvidia’s strong financial performance in the first quarter of fiscal year 2025 exceeded market expectations, demonstrating the company’s leading position and strong growth momentum in the AI field.
Jensen Huang is confident about the company’s future, foreseeing that artificial intelligence will lead the next wave of industrial revolution and bring significant productivity improvements to various industries.
Furthermore, the company’s innovation and accelerated development in the AI chip field, as well as the outlook for sovereign AI and multimodal AI, indicate that Nvidia will continue to play a key role in the AI revolution and face more challenging industry opportunities.
References: Titanium Media: “Nvidia’s net profit soars by 628%, but AI chip sales slow down,” Yinshi Finance: “Nvidia’s quarterly report exceeds expectations, Jensen Huang: The next industrial revolution has begun,” Netease Technology: “Nvidia soars on Wall Street, revenue grows by 262%, Jensen Huang says a new industrial revolution is beginning,” Economic Observer: “AI sales driving Nvidia’s revenue and profit surge,” Communications Nuggets: “Nvidia’s financial report interpretation: Starting a new industrial revolution, the Token business will create a value of $100 trillion,” Wall Street News: “Nvidia releases financial report! Jensen Huang exclaims: The next industrial revolution has begun.”