Nvidia doubled profits in 2024. And its outlook is rosy despite AI jitters

New York (CNN) — Nvidia exceeded Wall Street’s expectations as it closed out 2024, achieving stunning sales and profit growth — and much of Silicon Valley is likely breathing a sigh of relief at what the results say about the artificial intelligence industry.

The chipmaking giant’s shares dipped just over 1% in after-hours trading Wednesday, immediately after the company released its earnings report for the quarter ended in January and its full 2025 fiscal year. However, shares quickly turned positive, gaining 2.7% within half an hour of the report’s release.

Nvidia raked in $39.3 billion in sales in the January quarter, slightly above Wall Street’s expectations and 78% higher than the same period in the prior year. Profits from the quarter grew 72% year-over-year to $22 billion.

For the full year, the company’s profits more than doubled to $74.3 billion, capping off a banner year in which Nvidia cemented itself as perhaps the most important player in the growing AI industry.

And Nvidia expects its growth to continue. The company said it expects sales to grow 65% year-over-year to $43 billion in the current quarter, exceeding analysts’ expectations.

The results underscore that despite increased competition, Nvidia remains unmatched at producing the chips many companies use to power AI systems. Expectations were heightened heading into Wednesday’s report given Nvidia’s role as a barometer of the broader tech sector, which has faced tough investor questions about AI spending. Shares of fellow tech giants Google, Meta, Microsoft, Amazon and Meta were all trading higher after-hours following Nvidia’s report.

In recent weeks, Silicon Valley has been processing what the launch of DeepSeek — a highly capable but more efficient AI model from a year-old Chinese startup — means for the American AI industry.

Some industry experts suggested that the launch of the less power-hungry rival could add to existing fears that US tech giants are overspending on AI infrastructure without sufficient return in that investment. Any pullback in that spending could hit Nvidia’s bottom line, given the company’s central role in providing many of the chips to run AI systems.

Nvidia’s share price has fallen 5% since the start of this year as investors digest the DeepSeek news, although shares remain up 65% from a year ago.

And where Nvidia’s shares go, much of the rest of the tech market tends to follow. The tech-heavy Nasdaq Composite index is down 1% since the start of this year, dragged down by weak tech stock performance.

“Nvidia is the bellwether and market-darling stock that is of vital importance to the broader markets,” Chris Brigati, chief investment officer at investment firm SWBC, said in emailed commentary ahead of Nvidia’s report.

Still, analysts have been quick to point out that major AI players have announced plans to continue funneling tens of billions of dollars into infrastructure, despite the questions DeepSeek has raised. And some experts say a push toward more efficient, inexpensive AI models would actually be a boon to Nvidia and other AI players by accelerating the technology’s adoption.

Wedbush analyst Dan Ives said he expects to see $325 billion in capital expenditures this year from just the “Magnificent Seven” tech companies — Microsoft, Amazon, Meta, Apple, Alphabet, Nvidia and Tesla — with much of that spending aimed at supporting AI growth.

“We have seen NOT ONE AI enterprise deployment slow down or change due to the DeepSeek situation,” Ives said in emailed commentary Tuesday. “No customer wants to ‘lose their place in line’ as it is described to us for Nvidia’s next gen chips.”

Despite jitters over DeepSeek and some early challenges in rolling out Nvidia’s new Blackwell chips, “Nvidia’s results reaffirm that it continues to lead the AI landscape, sidelining skeptics,” Emarketer technology analyst Jacob Bourne said following Wednesday’s results. He added that investment from tech giants “demonstrate sustained demand for Nvidia’s hardware.”

Asked about his expectations for future AI growth on a call with analysts Wednesday, Nvidia CEO Jensen Huang laid out a vision for a future in which AI has permeated numerous areas of life. He pointed to the auto industry as an example, saying that employees would use AI agents to work more productively, while the vehicles themselves would also be infused with AI.

“Someday, there will be a billion cars on the road and every single one of those cars will be robotic cars,” he said. “And they’ll all be collecting data, and we’ll be improving them using an AI factory.”

This story has been updated with additional developments and context.

The-CNN-Wire
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