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NVIDIA has once again demonstrated its dominance in the AI and semiconductor markets by posting record-breaking financial results for the second quarter of fiscal 2025. The company reported a staggering revenue of $30 billion, marking a 15% increase from the previous quarter and an impressive 122% year-over-year growth. The surge was primarily driven by its Data Center segment, which generated $26.3 billion, up 16% from Q1 and 154% from the same period last year.
- NVIDIA made a record $30 billion in revenue in the last quarter, largely due to its success in AI and data centers.
- Despite strong financial results, NVIDIA’s stock dropped because investors expected even bigger growth.
- The company’s new AI chip, Blackwell, faced some production delays, causing concern among investors.
- NVIDIA’s CEO believes AI will revolutionize every industry, and the company is at the forefront of this technology.
- NVIDIA’s future looks strong, but meeting high expectations will be challenging as it continues to lead in AI innovation.
Financial Highlights and Market Reaction
Despite these remarkable numbers, NVIDIA’s stock faced a surprising dip in the market. Shares fell by 6% in after-hours trading following the announcement, with a further 2% drop in early trading the next day. Analysts attribute this decline to the market’s extremely high expectations, which were not fully met despite the impressive earnings. NVIDIA’s GAAP earnings per diluted share were $0.67, up 12% from the previous quarter and 168% from a year ago, while non-GAAP earnings were $0.68 per share, up 11% sequentially and 152% year-over-year.
CEO Jensen Huang’s Vision
Jensen Huang, NVIDIA’s founder and CEO, highlighted the continued strong demand for the company’s Hopper chips and the growing anticipation for the upcoming Blackwell architecture. Huang emphasized that generative AI, powered by NVIDIA’s technology, is set to revolutionize every industry. He also pointed out the company’s broadening reach with new product categories such as Spectrum-X Ethernet for AI and NVIDIA AI Enterprise software, which are gaining significant traction.
Market Concerns and Future Outlook
Despite these positive developments, some market observers are concerned about the sustainability of NVIDIA’s growth. Analysts noted that while NVIDIA continues to surpass expectations, the pace of growth is showing signs of slowing. Additionally, production delays in the new Blackwell chips could potentially impact future performance. However, NVIDIA’s outlook remains optimistic, with the company projecting third-quarter revenue of $32.5 billion, plus or minus 2%.
Broader Market Implications
NVIDIA’s results and the subsequent market reaction have broader implications for the AI sector. The company has become synonymous with AI, and its performance is closely watched as a barometer of the industry’s health. While NVIDIA’s leadership in AI chips remains unchallenged, competitors like Intel are slowly making strides that could eventually erode NVIDIA’s market share.
NVIDIA’s second quarter of fiscal 2025 showcases its continued dominance in the AI and data center markets, but also highlights the challenges of maintaining investor confidence amid sky-high expectations. As the company navigates these challenges, all eyes will be on its ability to sustain its growth trajectory and continue leading the AI revolution.
NVIDIA CORPORATION
Condensed Consolidated Statements of Income
(In millions, except per share data) (Unaudited)
| Three Months Ended | Six Months Ended | |
|---|---|---|
| July 28, 2024 | July 30, 2023 | |
| Revenue | $30,040 | $13,507 |
| Cost of revenue | $7,466 | $4,045 |
| Gross profit | $22,574 | $9,462 |
| Operating expenses | ||
| – Research and development | $3,090 | $2,040 |
| – Sales, general and administrative | $842 | $622 |
| Total operating expenses | $3,932 | $2,662 |
| Operating Income | $18,642 | $6,800 |
| Other income (expense), net | $572 | $181 |
| Income before income tax | $19,214 | $6,981 |
| Income tax expense | $2,615 | $793 |
| Net income | $16,599 | $6,188 |
| Net income per share | ||
| – Basic | $0.68 | $0.25 |
| – Diluted | $0.67 | $0.25 |
| Weighted average shares used in per share computation: | ||
| – Basic | 24,578 | 24,729 |
| – Diluted | 24,848 | 24,994 |
NVIDIA CORPORATION
Condensed Consolidated Balance Sheets
(In millions) (Unaudited)
| July 28, 2024 | January 28, 2024 | |
|---|---|---|
| ASSETS | ||
| Current assets: | ||
| Cash, cash equivalents, and marketable securities | $34,800 | $25,984 |
| Accounts receivable, net | $14,132 | $9,999 |
| Inventories | $6,675 | $5,282 |
| Prepaid expenses and other current assets | $4,026 | $3,080 |
| Total current assets | $59,633 | $44,345 |
| Property and equipment, net | $4,885 | $3,914 |
| Operating lease assets | $1,556 | $1,346 |
| Goodwill | $4,622 | $4,430 |
| Intangible assets, net | $952 | $1,112 |
| Deferred income tax assets | $9,578 | $6,081 |
| Other assets | $4,001 | $4,500 |
| Total assets | $85,227 | $65,728 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $3,680 | $2,699 |
| Accrued and other current liabilities | $10,289 | $6,682 |
| Short-term debt | – | $1,250 |
| Total current liabilities | $13,969 | $10,631 |
| Long-term debt | $8,461 | $8,459 |
| Long-term operating lease liabilities | $1,304 | $1,119 |
| Other long-term liabilities | $3,336 | $2,541 |
| Total liabilities | $27,070 | $22,750 |
| Shareholders’ equity | $58,157 | $42,978 |
| Total liabilities and shareholders’ equity | $85,227 | $65,728 |
NVIDIA CORPORATION
Condensed Consolidated Statements of Cash Flows
(In millions) (Unaudited)
| Three Months Ended | Six Months Ended | |
|---|---|---|
| July 28, 2024 | July 30, 2023 | |
| Cash flows from operating activities: | ||
| Net income | $16,599 | $6,188 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Stock-based compensation expense | $1,154 | $842 |
| Depreciation and amortization | $433 | $365 |
| Gains on investments | $(193) | $(60) |
| Deferred income taxes | $(1,699) | $(746) |
| Other | $(144) | $(69) |
| Changes in operating assets and liabilities, net of acquisitions: | ||
| Accounts receivable | $(1,767) | $(2,986) |
| Inventories | $(803) | $296 |
| Prepaid expenses and other assets | $714 | $(376) |
| Accounts payable | $823 | $777 |
| Accrued liabilities and other current liabilities | $(888) | $1,986 |
| Other long-term liabilities | $260 | $131 |
| Net cash provided by operating activities | $14,489 | $6,348 |
| Cash flows from investing activities: | ||
| Proceeds from maturities of marketable securities | $4,094 | $2,598 |
| Proceeds from sales of marketable securities | $15 | – |
| Purchases of marketable securities | $(5,744) | $(2,542) |
| Purchase related to property and equipment and intangible assets | $(977) | $(289) |
| Acquisitions, net of cash acquired | $(279) | – |
| Purchases of investments in non-affiliated entities | $(344) | $(235) |
| Proceeds from sales of investments in non-affiliated entities | $50 | – |
| Other | – | $21 |
| Net cash used in investing activities | $(3,185) | $(447) |
| Cash flows from financing activities: | ||
| Proceeds related to employee stock plans | – | $1 |
| Payments related to repurchases of common stock | $(7,158) | $(3,067) |
| Repayment of debt | $(1,250) | $(1,250) |
| Payments related to tax on restricted stock units | $(1,637) | $(672) |
| Dividends paid | $(246) | $(99) |
| Principal payments on property and equipment and intangible assets | $(29) | $(11) |
| Net cash used in financing activities | $(10,320) | $(5,098) |
| Change in cash, cash equivalents, and restricted cash | $984 | $803 |
| Cash, cash equivalents, and restricted cash at beginning of period | $7,587 | $5,079 |
| Cash, cash equivalents, and restricted cash at end of period | $8,571 | $5,882 |