Nvidia Gives ‘Underwhelming’ Report After Two Years of Blowouts

By Investor Empires On Feb 27, 2025

(Bloomberg)-NVIDIA Corp. provided. The chips maker at the Pretty Book Center, Amnesty International, is a good quarterly numbers, not great on Wednesday, which resulted in a silent response from investors who used to the results of the bombing.

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Nafidia said in a statement that sales will be about $ 43 billion in the first quarter of the fiscal year, which will continue until April. Analysts estimated $ 42.3 billion on average, with some expectations of $ 48 billion.

The company also warned that the total profit margins will be more strict than expected as it rushes to launch a new chips design called Blackweell. There is a risk of documenting customs tariffs on results. After the fluctuation between gains and losses, NVIDIA shares fell below less than 1 % in late trading on Wednesday.

The mixed view comes in a fragile time to make artificial intelligence. NVIDIA shares have decreased this year on fears that the data center operators will slow up spending. Deepseek has also raised the Chinese startup also raised fears that Chatbots will be developed on cheap, which may reduce the need for strong NVIDIA chips for artificial intelligence.

Although NVIDIA executives dealt with most of these issues, it has become difficult for the company to make great profit reports.

“The guidance was a little imagination,” said Logan Burke analyst Edward Jones in a report. But the early sales of the Blackwell SIM should help reduce the investor's concerns after previous reports about delaying production.

The company received $ 11 billion in Blackwell's revenues in the fourth quarter, which NVIDIA described as “the fastest productive slope” in its history. “The demand for Blackwail is amazing,” said CEO Senson Huang said in the statement.

Although the company's fourth company's sales topped the analysts, they did this with a smaller margin since February 2023. At the same time, the profits had the narrowest amount of the upward trend since November 2022, according to the data collected by Bloomberg.

The stock decreased by 2.2 % this year, after the gains of the strategy in 2023 and 2024, which turned NVIDIA into a chip maker in the world.

NVIDIA has been the largest beneficiary of an enormous increase in the spending of artificial intelligence, which doubled its revenue over the past two years. Many of the largest technology companies pour tens of billions of dollars into data center devices, and NVIDIA is the dominant seller of processors that create and operate the AI program.

Along the way, NVIDIA and its CEO became synonymous with the revolution of artificial intelligence – and the largest Belweether how to offer. Huang has spent most of the past two years at the intersection of the world as human artificial intelligence technology and is believed to be in the early stages of spread throughout the economy.

Sales rose in the fourth quarter, which ended on January 26, to 39.3 billion dollars. Those identical estimates, although some expectations ranged from $ 42 billion. Emphasizing the speed of the company's growth: its latest quarterly sales were greater than the annual NVIDIA revenue two years ago, when it reached 27 billion dollars.

The profit was 89 cents per share, minus some elements. Wall Street was looking for 84 cents.

“We will grow strongly in 2025,” Hwang said during a collective call with analysts.

The Data Center Unit, to a large extent, was raised to the largest revenue in Nafidia, sales of $ 35.6 billion. That won the average estimate of $ 34.1 billion. Games-related sales-as soon as NVIDIA's basic works reached $ 2.5 billion. Analysts expected $ 3.02 billion on average. The cars were $ 570 million.

The Data Center Department alone has more revenues from Intel Corp. And Advanced Micro Devices Inc. That is born in total.

NVIDIA has implemented its name by selling graphics processors, but it has discovered that technology also has Amnesty International applications. Its chips help software models during the training process, when they learn to learn and respond to the real world's inputs. NVIDIA components are also used in the systems that run the program after that, a stage known as inference, and helps energy services such as ChatGPT.

With the profit report, analysts expressed concern about the short -term growth in the largest business in NVIDIA, which serve the data center customers. The big question was whether the boundaries of the offer and the shift to Blackwell would slow down. New technology is more advanced, which brings manufacturing challenges.

Deepseek added to the concerns after release of a strong AI model that he said it requires much lower resources to create it. In late January, the announcement led to a large -scale sale of prosecution shares. NVIDIA has given an amazing amount of $ 589 billion in capital in one day of trading, a record for markets.

But the main NVIDIA customers, such as Microsoft Corp. , Maintaining capital spending plans, indicating that increased spending on artificial intelligence will remain strong.

During the collective call, Huang has argued that Dibsic will be interested in a new approach to artificial intelligence, and expanding the demand for NVIDIA products. He said the Deepseek model depends on careful control, so it will require more computing sessions from “one shot” training for other programs. In fact, the approach may require millions of times more computing strength.

“The future thinking models can consume more account,” said Huang.

Although Blackwell will help deal with these computing tasks, the offer has come at a cost. Nafidia said that obtaining the product to the market was affected by the profit margins. The savings will come later when the company is able to improve its supply chain, according to financial director Colette Chris. The total margin, or the percentage of the remaining revenues after deducting the cost of production will return to the “mid -seventies” rate by the end of the year.

In the current quarter, this procedure will be about 71 %, as NVIDIA said, around a point less than the average analyst estimates.

NVIDIA has not only been absent from analysts' estimates of quarterly revenues during the past five years. Expectations have exceeded more than 10 % in recent periods, creating a high tape of its performance.

“We believe it will be difficult for the administration to continue to overcome the expectations for future growth,” said Burke Edwards Jones.

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