Nvidia Reports Strong Growth as Investors Overlook Questions about AI Profitability

Nvidia once again reported impressive quarterly results, but largely reaffirmed what investors already know — demand for AI computing power remains insatiable.

The real question — whether all this new capacity will be profitable in the future — still remains unanswered. For now, investors aren’t focusing on that, choosing instead to enjoy another quarter of strong growth that lifted Nvidia shares along with other AI-linked companies.

Nvidia’s stock jumped more than 5% after hours, and other companies tied to AI demand also rose: Advanced Micro Devices (+4%), Broadcom (+3%), Taiwan Semiconductor (+3%), Super Micro Computer (+5%), and Oracle gained over 3%.

Nvidia’s most important business segment — data centers — generated $51.2 billion in sales, surpassing analyst expectations of $49.09 billion and marking a 66% year-over-year increase.

“There’s a lot of talk about an AI bubble,” Nvidia CEO Jensen Huang said during the conference call. “From our perspective, the situation looks very different.”

In November, Nvidia’s shares had fallen about 8% due to concerns about an AI bubble, but the strong earnings report is giving investors an opportunity to buy at lower levels.

Despite the impressive revenues and outlook, most companies investing billions in GPUs are still trying to figure out how they will monetize AI. “The real question is whether this compute power is economically viable — and that will remain a persistent challenge for a long time,” commented Adam Crisafulli, founder of Vital Knowledge.

Investor Michael Burry, known from “The Big Short,” recently argued that major cloud and AI infrastructure providers underestimate depreciation costs, assuming that chips will have a longer useful life than is realistic.

Competition is also rising — AMD and custom AI accelerators from big tech companies are starting to take some share of Nvidia’s dominant market position.

“These results are very strong, but expected,” said David Russell of TradeStation. “They come on a day when Alphabet hit a new high thanks to an AI model that doesn’t use Blackwell, so investors may start wondering whether it’s time to look at other companies. The question of whether Nvidia has reached its peak in growth and market share remains open.”