Nvidia (NASDAQ: NVDA) delivered one of the most anticipated quarterly reports on Wall Street on Wednesday evening, and the AI powerhouse did not disappoint.
The company’s data center revenue continued its strong upward trajectory, and CEO Jensen Huang remained highly optimistic about the future. However, despite these positives, Nvidia’s stock has dropped more than 13% in the past five days, extending its 2025 losses after an outstanding 171% return last year. Given the company’s strong fundamentals, this pullback may present a valuable opportunity for long-term investors.
A Short-Term Dip, but Long-Term Strength
Nvidia had previously forecasted fourth-quarter revenue of approximately $37.5 billion. As it has consistently done over the past year, the company outperformed expectations, reporting sales of $39.3 billion. Full-year revenue more than doubled year over year.
However, investors are now looking ahead to assess when Nvidia’s rapid growth might start to decelerate. The company projects revenue of around $43 billion for the current quarter, representing sequential growth of less than 10%—a slowdown from the mid-teens growth rate it maintained throughout much of last year.
One key takeaway from the company’s earnings call was Huang’s remarks on China. He noted that “data center sales in China remained well below levels seen before export controls” and emphasized that “the market for data center solutions in China remains highly competitive.”
Additionally, Nvidia’s profitability is expected to take a slight hit. The company anticipates gross margins of approximately 71% for the fiscal first quarter, compared to 75% in the fiscal year that ended on January 26.
Future Growth Opportunities
Despite these concerns, Nvidia’s data center business continues to generate impressive growth and profitability. Meanwhile, the company’s automotive and robotics segment is beginning to gain momentum, with strong quarterly growth. While still a relatively small part of Nvidia’s overall revenue compared to its AI-driven data center business, this segment could become a key driver of future expansion.
Given Nvidia’s track record of innovation and leadership in AI, investors may want to think twice before betting against the company.
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