Nvidia has projected strong revenue growth for Q1 2025, dispelling concerns about a slowdown in AI chip demand. The company’s latest forecast highlights booming interest in its new Blackwell semiconductors, with CEO Jensen Huang calling demand for the chips “amazing.”
AI Demand Drives Nvidia’s Growth
Nvidia, the leading supplier of AI chips, is undergoing a critical product transition to its Blackwell chip architecture. Unlike previous generations, Blackwell moves beyond individual chips to fully integrated AI computing systems, combining graphics processors, networking equipment, and CPUs.
The company generated ₹91,500 crore ($11 billion) from Blackwell-related products in Q4, accounting for nearly 50% of its total data center revenue. For Q1, Nvidia expects revenue to reach ₹3.58 lakh crore ($43 billion) ±2%, exceeding analysts’ forecast of ₹3.48 lakh crore ($41.78 billion), according to LSEG.
Despite this growth, Nvidia’s gross margin is expected to drop to 71%, slightly below Wall Street’s 72.2% forecast. However, CFO Colette Kress reassured investors that margins would return to the mid-70% range later in the fiscal year as Blackwell production scales up and costs decrease.
Market Reaction & DeepSeek’s Competitive Challenge
Following Chinese AI startup DeepSeek’s claims of developing cost-efficient AI models rivaling Western competitors, Nvidia faced skepticism about the sustainability of AI chip demand. The company lost ₹49.33 lakh crore ($593 billion) in market value last month ,the largest one-day loss for any U.S. firm.
However, Nvidia’s strong Q4 earnings and Q1 guidance have eased investor concerns. AI hyperscalers, including Microsoft and Meta, continue to spend aggressively, with Microsoft committing ₹6.65 lakh crore ($80 billion) to AI infrastructure and Meta pledging ₹5.40 lakh crore ($65 billion). Meanwhile, Chinese firms are ramping up orders for Nvidia’s H20 AI chips, further boosting demand.
Financial Performance & Key Metrics
- Q4 Revenue: ₹3.27 lakh crore ($39.3 billion) (Up 78% YoY, beating ₹3.17 lakh crore ($38.04B) estimate).
- Data Center Revenue: ₹2.97 lakh crore ($35.6 billion) (Up 93% YoY, beating ₹2.81 lakh crore ($33.59B) estimate).
- Adjusted EPS: ₹74 ($0.89) per share (Above analysts’ ₹70 ($0.84) estimate).
Nvidia’s Stargate data center project, backed by former U.S. President Donald Trump, will also feature Nvidia’s Spectrum X ethernet networking technology, further solidifying its role in AI infrastructure.
Outlook: Sustained AI Growth Despite Challenges
While Nvidia faces competition from DeepSeek and concerns over oversupply in the AI market, its Blackwell chip transition and deep ties with major cloud companies suggest continued dominance. If demand remains strong and cost efficiencies improve, Nvidia’s growth trajectory in AI computing could remain intact throughout 2025.
