Nvidia’s profit doubles to $59.69 billion thanks to AI spending

Silicon Valley’s artificial intelligence spending may have unsettled Wall Street, but chip maker Nvidia is still making money selling to the biggest tech companies.

Nvidia’s profit for the quarter that ended in July more than doubled from a year earlier to $59.69 billion, the company said on Wednesday. Revenue also more than doubled to $96.22 billion. Just three years ago, Nvidia’s quarterly profit was $6.2 billion.

“AI has reached its inflection point,” Jensen Huang, chief executive of Nvidia, said in a statement.

In a sign that the AI ​​boom still has great momentum, Nvidia told investors that its forecast revenue for the current quarter will rise 90 percent from a year earlier to $108 billion. The company expects to grow about 70 percent next year, although it is “constrained by supply,” Colette Kress, Nvidia’s chief financial officer, said on a call with analysts and investors.

“While we will work to close the supply-demand gap, we expect supply to remain a bottleneck” until at least January 2028, Ms. Kress said.

Nvidia’s results and projections exceeded expectations. Wall Street analysts had forecast quarterly profit of $50.94 billion on revenue of $91.96 billion, according to FactSet. For the current quarter, Wall Street had forecast sales of $103.77 billion. Nvidia shares rose as much as 4 percent in after-hours trading on Wednesday.

Nvidia chips are at the center of giant AI data centers, and demand for these chips has become a barometer of the AI ​​boom. Other tech companies have been buying tens of billions of dollars worth of these chips, making Nvidia the world’s most valuable public company with a market capitalization of about $5 trillion.

More than a decade ago, Mr. Huang pushed Nvidia — which at the time made chips mostly for video games — to make software and chips to build artificial intelligence. Now the Silicon Valley company controls an estimated 90 percent of the market for advanced semiconductors that power artificial intelligence.

Amazon, Google, Microsoft and Meta are expected to spend $1.5 trillion on building data centers this year and next, according to FactSet. Nvidia chips populate these data centers.

In the most recent quarter, Nvidia’s data center revenue rose 117 percent to $89 billion — more than 90 percent of its revenue.

Nvidia and Amazon announced an agreement on Wednesday to use an additional two million Nvidia chips on Amazon’s cloud service. The companies will also build data centers for the US government that could allow intelligence agencies to run upcoming advanced artificial intelligence models from companies like OpenAI.

A race in the construction of data centers has caused a shortage of memory chips, which affects Nvidia itself. The company is “experiencing extreme pricing conditions in memory” and its margins will shrink as a result, Ms. Kress said. Nvidia will also raise prices in the quarter ending in April next year.

While Nvidia’s revenue from other sources, such as the automotive industry, is “still nice, pretty small,” those sources could ultimately lead to “some valuation expansion,” said David Wagner, director of equity at investment firm Aptus Capital Advisors.

“Data centers will be the driving force in the near future,” he said. “While others are growing quite significantly, it’s not yet their time to shine.”

Nvidia is looking to expand into China, which could bring the company billions of dollars in revenue. President Trump authorized Nvidia to sell the powerful H200 chip to China. But Mr. Huang has been less successful in Beijing, where the government has been slow to allow Chinese companies to buy Nvidia chips.

In the quarter that ended in July, H200 shipments to China-based customers accounted for less than 1 percent of Nvidia’s data center revenue, Ms. Kress said.

Nvidia is also a leading financier of the AI ​​boom. This month, the company agreed to spend up to $105 billion to support a data center in Pike County, Ohio, that OpenAI plans to lease. Nvidia and six giant asset managers, private equity firms and banks also announced an effort to raise $500 billion in financing for Nvidia customers to pay for chips, data centers and computing power.

Complicated financing arrangements are leading some investors to question “whether to discount the growth rate and the size of the market” for AI chips from the likes of Nvidia, said Gil Luria, head of technology research at investment bank DA Davidson.

The question for investors, Mr. Luria said, is: “How big would the market be if Nvidia didn’t fund its customers?”

Julian Barnes and Dustin Volz contributed reporting from Washington.