NVIDIA prepares to release its fourth-quarter fiscal 2025 results post-market close on February 26, 2025. Given Nvidia's central role in the AI boom and its massive influence on market sentiment, this report will be closely watched. Beyond the numbers themselves, guidance and commentary about AI chip demand could impact the entire tech sector. Here's a look at what to expect from the earnings report:
Adjusted Earnings Per Share (EPS): $0.842, marking a 63% year-on-year growth
Revenue: $38.26 billion, up 73% from last year
Adjusted Net income: $21.03 billion
EBITDA: $25.25 billion
Wall Street focuses on the company's guidance for fiscal 2026's first quarter, with analysts forecasting nearly $42 billion in revenue. If management's guidance tops this number, it could help alleviate concerns about the DeepSeek development's impact on demand.
DeepSeek Is “Very Bullish” for Nvidia, Not Bearish
The AI landscape witnessed significant shifts in early 2025, marked by the emergence of new players and technological breakthroughs. One of the most notable developments has been the rise of the Chinese research lab DeepSeek.
Investors will be looking forward to what management has to say about Chinese start-up DeepSeek. On Jan. 27, shares of Nvidia dropped 17% due to concerns about a potential slowdown of spending on its graphics processing unit (GPU) chips and related tech. The sell-off was sparked by DeepSeek's announcement that it trained an open-source AI model for significantly less money than ChatGPT owner OpenAI and others have spent to train their models.
Cantor Fitzgerald analysts pushed back against fears that the release of DeepSeek V3, a new large language model (LLM), could signal peak spending on GPUs.
Instead, in a note on Jan. 27, Cantor Fitzgerald reaffirmed its Overweight rating on Nvidia stock, keeping the price target steady at $200.00. The firm's endorsement comes amidst Nvidia's advancements in AI, specifically through its DeepSeek technology. The progress in AI is viewed as a driver for increased demand in computing power over time.
The research firm highlighted the significance of DeepSeek's contribution to the field of AI, hinting at the technology's potential to bring us closer to achieving Artificial General Intelligence (AGI). The continued development in areas such as pre-training, post-training, and time-based inference/reasoning was noted as a catalyst for future investments in large-scale clusters, which is expected to further accelerate AI capabilities.
Cantor Fitzgerald's analysis suggests that innovation in AI is leading to a reduction in the cost of adoption, thereby making AI more widespread. This trend supports the Jevons Paradox, which posits that as technology progresses, the efficiency of resource use increases, leading to a greater overall consumption of that resource—in this case, computing power.
Software, Blackwell Ramp-Up Remarks to Remain Key Emphasis
The primary catalyst driving Nvidia's outlook continues to be the unprecedented demand for AI computing infrastructure. The company's latest Blackwell architecture, particularly the GB200 NVL72 system, offers performance capabilities that are 30 times faster than previous generations for AI inference tasks, positioning Nvidia to maintain its market leadership.
The company's dominant position in the data center GPU market, where it captured an astounding 98% market share in 2023, provides a strong foundation for continued growth. The H100 GPU was the hottest AI data center chip globally in 2023, later superseded by the H200 and now by the entirely new generation of GPUs based on Nvidia's Blackwell architecture.
CEO Jensen Huang's recent comment about "insane" demand following Blackwell's broad release at the end of 2024 suggests a strong market reception, with sales reportedly meeting high expectations. Major customers' aggressive infrastructure expansion plans further support the outlook for sustained demand growth.
Oppenheimer & Co. analyst Rick Schafer is expecting upside to the company’s results and is forecasting Blackwell sales at about $5 billion for the fourth quarter, with a robust ramp expected in the fiscal first quarter. He also noted that sovereign AI, in which countries are building their own data centers, is becoming a meaningful growth driver.
Increased Capital-Spending Guidance from Meta, Microsoft, Amazon Web Services and Google
The cloud and AI war between Amazon, Microsoft, Meta, and Google is also favorable for Nvidia. According to pymnts.com, these giants plan a staggering $320 billion AI spend for 2025. Such aggressive data center spending will mean the demand for Nvidia's GPUs is highly likely to soar further in 2025. Meta plans to spend up to $65 billion on AI infrastructure (up from $39.2 billion last year), and Alphabet projects $75 billion in capital expenditures. Amazon potentially exceeds $100 billion in AI-related investments.
Global Semiconductor Supply Chain Concerns Ease
Last quarter, Nvidia executives told Wall Street that they expect to exceed “several billion dollars” in Blackwell revenue in the fourth quarter and that the product was in full production. That came after the company carried out a mask change, a big manufacturing shift, that caused a delay.
The global semiconductor supply chain remains critical to Nvidia's ability to meet the surging demand for its products. While the company has successfully navigated previous supply constraints, its ability to secure sufficient manufacturing capacity and maintain efficient distribution channels will be crucial for meeting the ambitious growth expectations set by Wall Street.
The company's relationships with key manufacturing partners and supply chain management strategies will be particularly important as it ramps production of its new Blackwell-based products while maintaining a supply of existing high-demand components.
Nvidia's Post-Earnings-Release Stock Price Movements
The data below is for the four quarters of fiscal 2024 and the three quarters reported so far for fiscal 2025. This is the period for which generative AI -- the tech behind OpenAI's ChatGPT chatbot and other newer chatbots -- has boosted the company's results.
There is not even a modest correlation between the size of the earnings beat and the stock's price movement the next day. Guidance can affect the stock price as much as, if not more than, the current quarter's results. Broader industry factors and overall market dynamics can also impact its movements.
