Nvidia reinforced its position as a dominant player in the semiconductor industry by nearly doubling its data center revenue in the latest quarter, underscoring the accelerating demand for artificial intelligence hardware. The company's adjusted earnings per share reached $1.87, exceeding analysts' forecast of $1.76, while its quarterly revenue surged 85% year-over-year to $81.62 billion, beating the consensus estimate of $78.86 billion.
The dramatic transformation in Nvidia’s revenue streams continued as data center sales now account for the lion’s share of income, surpassing the traditional gaming business that once dominated its portfolio. In the current quarter, data center revenue climbed 92% from the previous year, totaling $75.2 billion, highlighting the rapid adoption of AI infrastructure. Meanwhile, the edge computing segment, which includes robotics, automotive chips, and consumer graphics cards, grew 29% to $6.4 billion.
This shift reflects Nvidia's strategic overhaul in reporting its financial results, dividing its business into two distinct segments: Data center and edge computing. The change aims to provide clearer insights into how the company operates across these diverse markets, as each segment targets different customers and employs unique operating systems and market strategies. Prior to the AI surge, gaming accounted for over half of Nvidia’s revenue, but now represents less than 8%, while data center sales make up more than 90%.
Looking ahead, Nvidia projects revenue around $91 billion at the midpoint for the next quarter, outpacing Wall Street’s expectations of $87.39 billion. This forecast reflects ongoing momentum in AI deployment, as companies continue to expand their "AI factories," a term used to describe large-scale AI computing infrastructure. The CEO emphasized this growth as the largest expansion of infrastructure in human history.
On the earnings call, CFO Colette Kress highlighted rising demand and pricing for Nvidia’s flagship GPUs. The rental price for the H100 graphics processing unit has increased 20% year-to-date, while the A100 GPU rental cost has climbed nearly 15%, signaling strong market dynamics and tight supply in AI hardware.