Tech giant Nvidia has once again delivered a record-breaking quarter, posting $39.3 billion in revenue, a 12% increase from the previous quarter and an astonishing 78% jump year-over-year.
This figure surpassed Wall Street’s projected $38.3 billion, reinforcing the company’s dominance in the booming AI and data center markets.
The company’s full-year revenue hit $130.5 billion, up 114% from the previous fiscal year, demonstrating unwavering demand for AI chips despite temporary setbacks, including one of the worst stock slumps in history due to fears of emerging competition from China’s DeepSeek AI.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
With Nvidia forecasting next-quarter revenue to reach $43 billion, slightly above analyst expectations, it is now clear that the market panic triggered by DeepSeek’s entry into the AI race has subsided.
DeepSeek’s Shockwave and the Impact on Tech Stocks
The DeepSeek frenzy erupted in early 2025 when the Chinese AI startup DeepSeek AI announced that its new AI model could compete with models from top U.S. firms like OpenAI and Google DeepMind at a fraction of the cost. Investors reacted swiftly, fearing that China’s AI industry was closing the gap with American leaders, potentially threatening Nvidia’s stranglehold on the AI chip market.
The panic reached its peak when Nvidia’s stock lost nearly $600 billion in market capitalization in a single day, marking the largest single-day loss for any U.S. company in history. Tech stocks across the board tumbled, as Nvidia’s decline sent ripples through the AI sector, affecting chipmakers like AMD and Broadcom, as well as AI-heavy companies such as Meta, Alphabet, and Microsoft, all of which rely on Nvidia’s cutting-edge GPUs for AI training.
The mass selloff was fueled by speculation that DeepSeek’s breakthrough could drastically reduce demand for Nvidia’s expensive AI chips, especially in China, one of Nvidia’s largest markets. With U.S. export controls already restricting Nvidia’s high-end chips to China, many feared that DeepSeek’s AI models could lessen reliance on Nvidia’s technology, triggering a long-term decline in its dominance.
DeepSeek’s Disruption Was Short-Lived
While DeepSeek’s emergence sent ripples through the industry, Nvidia has since recovered, as Big Tech continues to aggressively invest in AI computing power. The AI chip race has intensified rather than slowed down, and Nvidia remains the primary supplier of high-performance GPUs.
In fact, China’s demand for Nvidia’s chips has surged, particularly for the H20 GPUs, which were designed to comply with U.S. export controls. Industry sources suggest that Chinese firms are stockpiling Nvidia chips, likely anticipating potential new U.S. restrictions from Donald Trump’s administration.
Additionally, the DeepSeek panic failed to dent Big Tech’s spending spree on AI infrastructure. Companies like Meta, Amazon, Google, and Microsoft have committed to spending as much as $320 billion on AI-related infrastructure, ensuring that demand for Nvidia’s chips remains sky-high.
Nvidia’s Data Center Boom
Nvidia’s data center division, which accounts for the majority of its revenue, delivered $35.6 billion in sales, up 93% year-over-year. This figure crushed analyst expectations of $34.2 billion, proving that Nvidia continues to dominate the AI chip industry despite mounting competition and geopolitical tensions.
The AI boom is showing no signs of slowing down, with companies racing to secure Nvidia’s cutting-edge hardware to train and deploy generative AI models. The insatiable demand for computing power has allowed Nvidia to sustain record-breaking revenue growth, even as margins continue to face short-term pressures.
However, one of the few weak spots in Nvidia’s earnings report was gross margins, which fell for the second consecutive quarter, coming in at 73.5%. CFO Colette Kress attributed this temporary margin compression to the rollout of Nvidia’s next-generation Blackwell architecture, which is expected to drive even greater AI performance in the coming quarters.
Despite the margin decline, Nvidia has assured investors that it remains highly profitable and that gross margins should stabilize once Blackwell enters full-scale production. Nvidia’s stock has surged 171% in 2025, accounting for more than 20% of the S&P 500’s overall gains this year.