Chip giant Nvidia beats earnings expectations, up 62%, defying AI bubble warnings

1:43A The NVIDIA logo appears in this illustration, Aug. 25, 2025. Dado Ruvic/Reuters, FILE

Chip giant Nvidia beat Wall Street’s profit expectations for the past three months, the company said on Wednesday, criticizing fears of an artificial intelligence bubble that have plagued markets in recent days.

The California-based company posted $57 billion in sales in the three months ended October, beating analysts’ expectations. 54.9 billion dollars. The jump in income marked an increase of 62% compared to the same quarter last year.

Nvidia has been closely watched by analysts as a driver of the stock market and economy as a whole, which has come to rely on massive spending on artificial intelligence to fuel further growth.

The latest test for the world’s most valuable company comes at a difficult time for markets, which have fallen for four straight days on fears of an AI bubble. Nvidia, which makes many of the chips that power artificial intelligence products, fell more than 10% over a two-week period before reversing higher on Wednesday ahead of its earnings release.

As major tech companies spend hundreds of billions on the chips and data centers needed for the energy-intensive technology, the financial benefits remain uncertain. Earnings posted by Nvidia gauged demand for a key building block of artificial intelligence, showing whether appetite for the technology remains high.

The results have major implications for the US economy, which is showing signs of strain. in recent months as hiring slowed and consumer sentiment softened.

A boom in artificial intelligence spending, the only bright spot, added an annualized 0.5 percentage point to gross domestic product growth in the first half of 2025, accounting for about a third of economic activity, according to Pantheon Macroeconomics.

“There is one company in the world that is at the heart of the AI ​​revolution,” Dan Ives, managing director of equity research at investment firm Wedbush, told ABC News in a statement, referring to Nvidia.

Fears of an AI bubble arose in the summer ahead of Nvidia’s earlier earnings. report, but the company challenged the skeptics.

Nvidia posted $46.7 billion in sales in the three months ended July, beating analysts’ expectations of $46.2 billion. The jump in revenue marked a 56% increase over the same quarter last year.

The company’s market capitalization is $4.5 trillion, roughly equal to the GDP of Japan or Germany. Nvidia expanded at breakneck speed after the AI ​​craze that began with the release of OpenAI ChatGPT in 2022, growing nearly 700% over the next two years.

In this April 30, 2025 file photo, President Donald Trump listens to a speech by Nvidia CEO Jensen Huang in the Cross Hall of the White House during the Invest in America event in Washington, DC. Andrew Harnick/Getty Images, FILE

Along with constant growth, the company is overcoming new challenges. President Donald Trump banned the sale of chips to China earlier this year before lifting the ban in July. A month later, Trump struck a deal with Nvidia and rival Advanced Micro Devices (AMD) that allowed the companies to sell chips in China if they remitted 15 percent of export revenue to the U.S.

“I said, ‘If I’m going to do this, I want you to pay us as a country something because I’m giving you a release,'” Trump said.

Earnings released in August said Nvidia did not sell any of its H20 chips in China during the most recent quarter, but the firm did not mention any losses related to the policy. The H20 chip was specially designed for the Chinese market.

In recent days, Nvidia has announced a large investment in AI, which shows confidence in the technology’s prospects. Nvidia on Tuesday announced a multibillion-dollar partnership with two of its biggest artificial intelligence partners: Microsoft and Anthropic.

Under the terms of the deal, Nvidia and Microsoft agreed to invest $15 billion in Anthropic, a leading developer of AI models. Meanwhile, Anthropic has pledged to buy Microsoft’s Azure computing infrastructure on Nvidia’s systems for $30 billion.

Source: abcnews.go.com