One of the most highly anticipated quarterly reports on Wall Street was provided by Nvidia (NASDAQ: NVDA) on Wednesday evening. And the artificial intelligence (AI) darling didn’t disappoint.
Data center revenue continued to surge higher, and CEO Jensen Huang sounded as optimistic as ever. Yet the stock has fallen more than 13% in the past five days alone.
That extended its losses in 2025 after an amazing 171% return in 2024. Based on the state of the business, though, the recent decline in the stock might just be a gift for long-term investors.
No time to get discouraged
Management previously guided investors to expect revenue of about US$37.5 billion in the fourth quarter. As has been the case all last year, the company exceeded that mark with sales of US$39.3 billion. Full-year revenue more than doubled year over year.
But investors are looking ahead to figure out when that revenue growth might slow. Nvidia sees sales of about US$43 billion in its current quarter. That would represent sequential growth of less than 10% compared to the mid-teens growth rate it had been reporting most of last year.
Investors also noticed something Huang said in the conference call for investors. “Data center sales in China remained well below levels seen on the onset of export controls. [And] the market in China for data center solutions remains very competitive,” he said.
Another concern is a decline in profitability. Gross margins in the current fiscal first quarter are expected to be about 71%. That compares to 75% in the fiscal year ended Jan. 26.
But Nvidia is still showing impressive growth and profits in the data center business. At the same time, its automotive and robotics segment is also beginning to take off. Quarterly growth there has been impressive.
Data source: Nvidia. Chart by author.
While it still pales in comparison to data center AI sales, this could be the catalyst for Nvidia’s next phase of growth. Investors would be wise not to bet against Nvidia.
