NVIDIA stock soars as AI-driven growth pushes annual revenue to $130.5bn

NVIDIA has once again delivered a historic earnings report, posting an unprecedented $39.3 billion in revenue for the fourth quarter of fiscal 2025, marking a 12% sequential increase and an astonishing 78% rise year-over-year. The company’s AI-driven growth continues to accelerate, largely fueled by surging demand for data center infrastructure and high-performance AI computing solutions.

For the full fiscal year 2025, NVIDIA reported $130.5 billion in total revenue, a remarkable 114% increase from the previous year’s $60.9 billion. The company’s GAAP earnings per diluted share skyrocketed 147% to $2.94, while non-GAAP EPS climbed 130% to $2.99, reflecting the profitability of its AI-focused strategy.

CEO Jensen Huang credited this growth to massive AI adoption, stating that the company is ramping up production of its Blackwell AI supercomputers— a move that has already generated billions in sales in just one quarter. He highlighted the increasing influence of agentic AI and physical AI, which are revolutionizing industries by making AI models and decision-making systems smarter.

What’s Driving NVIDIA’s Data Center Revenue Growth?

The biggest contributor to NVIDIA’s financial success is its data center business, which generated $35.6 billion in Q4 revenue, up 16% from Q3 and an astounding 93% year-over-year. For the full fiscal year, data center revenue reached $115.2 billion, reflecting a 142% annual increase.

This explosive growth in data center revenue is fueled by several factors. Enterprise AI, machine learning, and cloud AI workloads have skyrocketed, leading to increased demand for NVIDIA’s AI infrastructure and AI chips. The company has strengthened ties with Amazon Web Services (AWS), Microsoft Azure, Google Cloud, Oracle Cloud Infrastructure (OCI), and CoreWeave, all of which are deploying NVIDIA GB200 AI systems to meet customer demand.

NVIDIA has positioned itself as a key technology partner in major AI-driven projects, including the $500 billion Stargate Project, an ambitious initiative in AI supercomputing. The company is also expanding its presence in the biotech and pharmaceutical industries, collaborating with IQVIA, Mayo Clinic, Siemens Healthineers, and Illumina to advance AI-driven genomics, drug discovery, and medical imaging technologies.

How Is NVIDIA’s Gaming Division Performing Amid AI Expansion?

While AI-driven growth is driving the company’s record earnings, NVIDIA’s gaming division experienced a decline in Q4. Gaming revenue dropped to $2.5 billion, reflecting a 22% quarter-over-quarter decrease and an 11% decline year-over-year. Despite this, full-year gaming revenue still rose 9% to $11.4 billion, indicating resilience in the sector.

To counteract short-term fluctuations, NVIDIA launched next-generation GeForce RTX 50 Series GPUs, featuring the Blackwell architecture. These GPUs promise up to 2x performance improvements over their predecessors. Additionally, NVIDIA introduced DLSS 4, an AI-powered upscaling technology, now supported by 75 games and applications at launch.

While gaming revenue has dipped, NVIDIA is strategically shifting toward AI-powered gaming experiences, betting on RTX AI PCs to drive future demand. The growing intersection of AI and gaming is expected to reignite growth in this segment over the coming quarters.

What Are NVIDIA’s Projections for Fiscal 2026?

Looking ahead, NVIDIA remains bullish on its AI computing dominance, projecting Q1 fiscal 2026 revenue to reach $43 billion, with GAAP and non-GAAP gross margins expected at 70.6% and 71.0%, respectively. The company anticipates GAAP operating expenses of $5.2 billion and non-GAAP operating expenses of $3.6 billion, underscoring continued investment in AI research, cloud computing, and high-performance data center solutions.

The company is also expanding beyond AI computing, entering high-growth areas such as automotive AI. NVIDIA has secured partnerships with Toyota and Hyundai Motor Group, both of which are integrating NVIDIA DRIVE AI systems into their next-generation vehicles. The company also introduced NVIDIA Cosmos, a generative AI platform for physical AI development, aimed at accelerating innovation in autonomous driving, industrial automation, and smart robotics.

In addition to automotive AI, NVIDIA continues to expand its AI supercomputing efforts. The company is developing next-generation AI models and infrastructure solutions to power breakthroughs in computational science and quantum computing. These initiatives are expected to solidify NVIDIA’s dominance in AI-driven growth for years to come.

How Is NVIDIA’s Stock Performing in Light of Its AI-Driven Growth?

NVIDIA’s stock has surged significantly over the past year, reflecting strong investor confidence in its AI computing leadership. With record-breaking revenue growth, AI infrastructure dominance, and a robust fiscal outlook, analysts remain optimistic about the company’s long-term value proposition.

However, investors should also consider potential risks. AI chip shortages and manufacturing bottlenecks could impact production capacity and delivery timelines. Rival chipmakers, including Advanced Micro Devices (AMD) and Intel, are ramping up their AI chip strategies, creating heightened competition in the sector. The AI industry is also facing increased regulatory scrutiny, particularly concerning data privacy, AI ethics, and national security concerns related to AI chip exports.

Despite these challenges, NVIDIA remains the clear leader in AI computing, with strong fundamentals, a robust innovation pipeline, and expanding market opportunities.

Is NVIDIA Still a Strong Investment for 2025 and Beyond?

For investors, NVIDIA represents a compelling AI stock with high growth potential, backed by unmatched AI-driven growth, expanding AI applications, and strong market positioning. The company’s data center revenue surged by 142% year-over-year, reflecting the accelerating demand for AI computing.

Beyond data centers, NVIDIA is expanding its footprint in cloud computing, biotech, gaming, and automotive AI. With $130.5 billion in annual revenue and a projected $43 billion in Q1 fiscal 2026 revenue, the company is positioned as a top-performing tech stock. While near-term challenges exist, NVIDIA’s AI computing dominance positions it as a strong contender for long-term investors focused on AI and semiconductor innovation.