Nvidia Has Broken Its Revenue Record Once Again. Yet, the Company Is Much Smaller Than It May Seem

Nvidia has once again made history and broken its own revenue record, according to its latest financial results. This time, the company achieved $35.1 billion in revenue in a single quarter.

Why this matters. Nvidia keeps growing and even challenges enterprise growth limits in the digital age. The company’s growth is mainly due to an unprecedented demand for AI chips that exceeds previous forecasts.

Despite some geopolitical challenges, the surge in demand for the new Blackwell architecture chips has driven the recent revenue record.

Figures:

• $35.1 billion in sales.
• $19.3 billion in net profit.
• $30.8 billion generated from data centers
• $37.5 billion forecasted for the next quarter.

Overview. Nvidia’s success stems from a profound shift. Large companies are increasingly turning to AI as their main engine for growth and innovation. Meanwhile, Nvidia holds a near-monopoly in supplying the chips that enable this transition.

Historically, Nvidia focused on selling gaming graphics cards. However, its data center division is now generating ten times greater revenue. This marks the end of one era and, more importantly, the beginning of another.

• What’s particularly noteworthy is that Nvidia operates with far fewer employees than its competitors.
• With only 30,000 employees, it has significantly fewer than Apple, which has five times as many; Microsoft has eight times as many; and Amazon has 50 times as many. Yet, Nvidia has a higher market value than all of them.

Nvidia’s carefully managed and scaled growth contributes to the company’s profitability and helps explain its remarkably high profit margin.

What’s next. Some analysts doubted whether Nvidia could maintain its growth, but it certainly did. The future outlook remains positive. On a recent earnings conference call, Nvidia CFO Colette Kress told analysts that demand for the new Blackwell chips is “staggering.”

• To accommodate record orders, Nvidia has increased production.
• However, the geopolitical climate following the recent U.S. election introduces some uncertainty regarding potential future trade restrictions.

In detail. Nvidia’s dominant position in the AI market has reshaped the power dynamics of the technology industry. Its chips are now essential to the digital economy, much like oil was during the industrial age.

In fact, Nvidia occupies a position once held by major oil companies. Two decades ago, Exxon Mobil was among the leaders in the market. Today, Nvidia stands alongside other key technology companies.

Looking ahead, it remains to be seen how Nvidia will compete now that it’s reached the top. The company must find ways to maintain its lead in the face of ongoing competition from AMD and Intel (with AMD currently in a stronger position than Intel) while also navigating the uncertainties that come with a new U.S. presidency.

Image | BoliviaInteligente

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