NVIDIA nearly doubles its data center segment revenue, driving earnings beat and demonstrating infrastructure acceleration.
Nvidia Corp., the world's most valuable company, reported first-quarter adjusted earnings of $1.87 per share, well ahead of the analyst target of $1.76 per share. Revenue for the period jumped 85% from a year ago, to $81.62 billion, surpassing the analyst's $78.86 billion consensus estimate. The company reported total income of $58.32 billion at the end of the quarter, up from just $18.78 billion a year earlier. "The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed," said Nvidia Chief Executive Jensen Huang. Looking to the current quarter, Nvidia forecasted revenue of about $91 billion at the midpoint of its guidance range, ahead of Wall Street's forecast of $87.39 billion.
The chipmaker has notably changed the way it reports its finances, splitting its business numbers into two market buckets: Data center and edge computing. The data center unit generated total sales of $75.2 billion during the quarter, up 92% from the previous year. The new edge business, which includes sales of data processing devices for agentic and physical AI, robotics and automotive chips, plus graphics cards for personal computers and games consoles, delivered sales of $6.4 billion in the quarter, up 29% from a year earlier. This represents a dramatic shift from prior years—during fiscal 2020, gaming accounted for more than half of Nvidia's total revenue while data center sales represented only 27%, but those numbers have now flipped, with the latter segment accounting for more than 90% of the total, while gaming was less than 8%.
Chief Financial Officer Colette Kress told analysts that the buildout of AI factories has been accelerating, causing the value of infrastructure to rise significantly. The price of renting an H100 graphics processing unit has increased 20% in the year to date, while A100 cloud pricing has risen almost 15% over the same timeframe. Within the data center business, hyperscaler cloud providers accounted for more than half of all data center sales at more than $38 billion. The other $37 billion is tied to the new AI clouds, industrial and enterprise markets segment, now known as ACIE, which saw revenue triple year over year.
Nvidia is expanding beyond GPUs into new product lines and markets. Jensen Huang discussed the early demand for its next-generation rack-scale system for AI, called Vera Rubin, comprising 1.3 million components, including 72 Rubin GPUs and 36 Vera central processing units, which delivers 10 times more performance per watt than its predecessor. He said he's confident about the system's success because the company is "growing share in inference very, very quickly," as the number of companies developing frontier models grows, with Anthropic PBC becoming a key customer this year. Kress announced that Nvidia isn't satisfied with only being the world's GPU king and wants to become the "leading CPU supplier" as well, an area currently dominated by rivals such as Intel Corp. and Advanced Micro Devices Inc. The new Vera CPUs have opened a "brand new $200 billion tab" for the company, with Kress anticipating CPUs will generate about $20 billion in sales this year.
Nvidia also sells a new custom Groq language processing unit and an entire data center rack called LPX, an application-specific integrated circuit designed for specific computing tasks. Huang said he has high hopes for the Groq chips, but told analysts it will likely remain a "niche product" for some time to come. "LPX is designed for low latency and high token rate, but its throughput is low," Huang said. "The use case for LPX is not broad." Another ASIC maker is Cerebras Systems Inc., which made a blockbuster debut on the public markets last week in what was interpreted as a clear signal that the AI market is hungry for alternatives to Nvidia's chips.