Nvidia (NVDA +2.59%) is known for hitting it out of the park when it comes to earnings, surpassing analysts' estimates quarter after quarter and reporting record levels of revenue. This is thanks to the company's dominance in the red-hot growth area of artificial intelligence (AI), a $200 billion market forecast to reach $1 trillion by the end of the decade. Nvidia makes the world's fastest graphics processing units (GPUs) -- the chips powering the most crucial of AI tasks -- and a broad range of related products and services.
And the company's strong momentum kept going in the most recent quarter and fiscal year. The tech giant reported a 78% increase in fourth-quarter revenue to a record $39 billion and a 114% increase in full-year revenue to a record $130 billion. Nvidia also predicted revenue for the current quarter would reach $43 billion, representing an 65% increase year over year.
This is fantastic news, but the story behind the numbers is even more exciting and offers a clear picture of what's to come. Let's check out three crucial things from Nvidia's latest report that you shouldn't miss.
Image source: Getty Images.
1. The Blackwell ramp beat Nvidia's own expectations
This quarter marked a particularly important moment for Nvidia because the tech giant launched a potentially game-changing product: its new Blackwell architecture. The customizable platform, offering seven different chips and other key features for customers, already has brought in $11 billion in the company's fastest production ramp ever. Nvidia said it beat its own expectations regarding system availability and the ability to offer various configurations to customers.
This is key because Blackwell is a complex product to roll out, and Nvidia was able to do it and generate major revenue right out of the gate.
Importantly, the company expects a "significant ramp" of Blackwell in the current quarter -- the first quarter of the fiscal 2026 year.
It's also worth noting that demand for Blackwell remains incredibly strong. CEO Jensen Huang used the word "extraordinary" to describe it. The platform was designed to power reasoning inference, or the "thinking" over time a model does to solve complex problems. And this type of inferencing could supercharge Nvidia's growth moving forward.
NASDAQ: NVDA
Key Data Points
2. Gross margin may continue to narrow -- for now.
The complexity of rolling out a customizable product like Blackwell is weighing on Nvidia's profitability today, and this will continue in the months to come. This is because Nvidia has focused on speeding up manufacturing to meet demand for the platform. So the company's gross margin, which has been in the mid-70% range in recent times, has declined to the low 70s.
In the quarter, gross margin came in at 73%, and Nvidia predicts it will narrow to about 70% in the current quarter as the Blackwell ramp continues.
It's important to remember that even 70% represents a very high level of profitability. The fact that Nvidia can pull this off during such a major launch is impressive. Nvidia expects this dip to be temporary, as once the ramp is complete, the company sees ways of lowering costs. And it aims to return to a gross margin in the mid-70s later in the fiscal year.
So, I wouldn't be worried about this dip in gross margin, but it will be important to see if Nvidia can return to the extremely high-margin levels it established prior to the launch.
3. Nvidia knows what its customers have planned.
A few weeks ago, Chinese start-up DeepSeek announced it trained its model for a fraction of the amount tech giants have spent on their AI programs -- and investors worried that those giants would reconsider their investments. If they were to cut spending, that could hurt Nvidia's revenue prospects.
But Nvidia says a variety of elements are set to supercharge its growth. First, the company says it has "forecasts and plans" from its major customers.
"We have a fairly good line of sight of the amount of capital investment that data centers are building out toward," Nvidia's Huang said. Accelerated computing and reasoning AI will be crucial architecture in data centers, according to Huang, and that's great news because Nvidia's GPUs power these technologies.
The company is also powering the next phases of AI growth from agentic AI to apply the technology to companies' real- world problems to the build-out of sovereign AI to help governments develop their own platforms.
What does this mean for you as an investor?
Nvidia's earnings and share price have soared over the past few years, but these points add to evidence that the company's growth is far from over. As mentioned above, the AI market is in its early stages of existence, so there's a lot more to come, and Nvidia's innovation should help it to benefit through the various phases.
All of this means that Nvidia remains a solid AI stock to buy and hold for the long term.
