Nvidia reported strong earnings driven by its data center business, surpassing analyst expectations but falling short of the most optimistic forecasts, while its gaming revenue lagged behind. The company received a U.S. license to sell some H200 chips to China, but future sales remain uncertain due to regulatory hurdles in both the U.S. and China.
Nvidia recently reported strong earnings, surpassing Wall Street’s consensus expectations but falling just short of the most optimistic projections. The company forecasted fiscal first-quarter sales of about $78 billion, well above the analyst average of $72.8 billion, though slightly below the highest estimates of $80 billion. This pattern of beating consensus but not the loftiest expectations has become a recurring theme for Nvidia, leading to some investor disappointment despite the impressive numbers.
For the fourth quarter, Nvidia’s revenue climbed 73%, reaching just over $68 billion, with profits at $1.62 per share—both figures exceeding analyst projections. The primary driver of this growth continues to be Nvidia’s data center unit, which now vastly outpaces the company’s gaming division. While gaming revenue fell slightly short of projections, this is less significant given the data center’s overwhelming contribution to overall revenue.
The data center business has become the core of Nvidia’s financial success, generating over $60 billion in revenue compared to around $4 billion from gaming. This shift highlights how the company’s market focus and investor expectations have evolved over the past year, with the data center segment now dominating Nvidia’s financial narrative.
Regarding China, Nvidia’s outlook remains cautious and uncertain. While rival AMD has managed to generate some revenue from China by selling older technology, neither company has sold newer chips in the Chinese market recently. Nvidia is not making any assumptions about China’s contribution to its data center revenue in its first-quarter sales outlook, reflecting ongoing uncertainty.
However, Nvidia did disclose in a separate filing that it has received approval from U.S. authorities to begin small-scale sales of its H200 chips to China. Despite this green light, Nvidia has yet to generate any revenue from the H200 licensing program and remains unsure whether Chinese companies will be permitted by Beijing to make these purchases. The company’s future sales in China thus remain highly contingent on regulatory developments in both the U.S. and China.