Nvidia faces Wall Street’s high expectations two years into AI boom
Nvidia CEO Jensen Huang attends the “Winning the AI Race” Summit in Washington D.C., U.S., July 23, 2025.
Kent Nishimura | Reuters
It’s been two years since the explosion of generative artificial intelligence started to transform Nvidia’s business. Since then, the chipmaker’s revenue has more than tripled and profits have quadrupled.
Nvidia‘s fiscal second-quarter earnings report, scheduled for Wednesday, will mark the second anniversary of growth, as the company shifted from being known as a maker of gaming chips to its current position at the heart of the technology industry.
Last month, Nvidia became the first company to hit a $4 trillion market cap, and it’s continued to appreciate in value. Since the end of 2022, around the time OpenAI launched ChatGPT and sparked the generative AI boom, Nvidia’s stock price is up twelvefold. It’s up 33% this year, closing on Friday at $177.99.
Growth is still substantial for a company Nvidia’s size, but it has slowed dramatically. After five straight quarters of triple-digit expansion in 2023 and 2024, revenue growth dipped to 69% in the fiscal first quarter this year. Nvidia is expected to report a year-over-year jump of 53% to $45.9 billion in its second-quarter report, according to LSEG’s consensus of analyst estimates.
Data center revenue in the first quarter accounted for 88% of Nvidia’s total sales, the clearest sign of how significant AI has become to its business. The company said that 34% of total sales last year came from three unnamed customers. Analysts say Nvidia’s top end users are major internet companies and cloud providers such as Microsoft, Google, Amazon and Meta.
“The assumptions and performance of Nvidia really dictates what the market is going to start to price into the AI trade, and that whole AI trade has essentially been driving the market this past year,” said Melissa Otto, head of Visible Alpha Research at S&P Global, which aggregates Wall Street research.
Nvidia makes up about 7.5% of the S&P 500.
Tech’s megacap companies, other than Nvidia, reported quarterly results in late July, updating Wall Street on their investment plans. In all, they’re looking to spend roughly $320 billion on AI technology and data center buildouts this year.
OpenAI, which is still private but has a valuation in the hundreds of billions of dollars, says it will team up with SoftBank and Oracle to spend $500 billion over the next four years on the Stargate project, which President Donald Trump announced in January.
Jensen Huang, co-founder and CEO of Nvidia, displays the new Blackwell GPU chip during the Nvidia GPU Technology Conference in San Jose, California, on March 18, 2024.
David Paul Morris/Bloomberg via Getty Images
Analysts say about half of AI capital spending ends up with Nvidia. The company’s reliance on the so-called hyperscalers leaves it vulnerable to changes in the macroeconomic environment and in the artificial intelligence industry, which remains hard to predict.
OpenAI CEO Sam Altman said last week that he believes “investors as a whole are overexcited about AI,” and even said it could be a “bubble.”
But don’t expect a pullback yet. OpenAI CFO Sarah Friar told CNBC on Wednesday that the company “constantly” doesn’t have enough computing power.
As always, Wall Street will be paying close attention to Nvidia’s guidance and other forward-looking commentary from CEO Jensen Huang. For the fiscal third quarter, analysts are expecting revenue growth of 50% to $52.7 billion, according to LSEG. If Nvidia guides higher and tops estimates for the second quarter, analysts say that kind of “beat and raise” could drive AI optimism even higher.
Blackwell ramp
The most important offering from Nvidia is its Blackwell line, which includes individual graphics processing units and entire systems tying together 72 GPUs.
Strong Blackwell numbers would affirm Nvidia’s continuing technological lead and foothold among its key customers, said Ryuta Makino, an analyst at Gamco Investors, which has a stake in the company.
“It solidifies that hyperscaler spending is still very strong with the Blackwell ramp,” Makino said.
Nvidia said in May that its new product line reached $27 billion in sales, accounting for about 70% of data center revenue. That’s a steep increase from $11 billion in the prior quarter.
As more Blackwell chips get installed, experts anticipate that their superior computing power will enable companies like OpenAI and Anthropic to create even more capable AI models. OpenAI’s GPT-5, which was announced earlier this month, was trained on Nvidia’s last-generation Hopper chips, not the newer Blackwell processors.
Nvidia said last year that Blackwell would be limited by supply — how many chips its partners can build and ship — and not by demand.
Blackwell Ultra is expected to start shipping in the second half of 2025. Nvidia recently pushed back on an analyst report from Asia that said Rubin, the chip technology expected to comprise the bulk of GPU sales in 2027, was seeing early production problems.
One visible sign of Nvidia’s rise is Huang’s worldwide fame. He’s regularly name-checked by Trump and during the quarter traveled to meet with business leaders and officials in Taiwan, China, Germany, England and Saudi Arabia.
Huang recently struck a deal with Trump to regain access to the Chinese market. Nvidia will pay 15% of its China chip revenue to the U.S. government in exchange for licenses to export its China-focused AI chip called the H20, Trump said this month. The president added that he’d asked for 20%, but Huang bargained him down.
The H20 is worth a lot to Nvidia. The chip would have contributed about $8 billion in sales in the second quarter, Nvidia said in May, before the U.S. government said it would require a license to ship it to China, effectively shutting off sales.
Nvidia did not include any H20 sales in its guidance for the second quarter, and analysts doubt that it will include any in its forecast for the current period, partially because the Chinese government is pressuring its cloud providers to use homegrown chips from companies such as Huawei.
If H20 is included in guidance, it could boost revenue expectations by about $2 billion to $3 billion, according to analysts at KeyBanc, who recommend buying the stock. But they said they expect Nvidia to completely exclude it, following Advanced Micro Devices’ lead from early August.
“Additionally, given a potential 15% tax on AI exports and pressure from the China government for its AI providers to use domestic AI chips, we expect management to guide conservatively,” the KeyBanc analysts wrote.
Nvidia is working on a new China AI chip based on Blackwell that would also likely need the president’s approval.
“I’m sure he’s pitching the president all the time,” Commerce Secretary Howard Lutnick said about Huang last week on CNBC’s “Squawk on the Street.”
WATCH: CNBC’s interview with Commerce Secretary Howard Lutnick
Nurphoto | Nurphoto | Getty Images
Google-owned YouTube on Monday said it may remove channels including Fox Broadcast Network, Fox News and Fox Sports from its TV streaming platform if it doesn’t reach an agreement with Fox Corporation.
YouTube TV’s renewal date with Fox is coming on Wednesday, and while the two companies have been in ongoing negotiations, they’ve been unable to reach a deal, the YouTube team wrote in a blog post. The company also emailed YouTube TV subscribers about the potential fall out with Fox.
“Fox is asking for payments that are far higher than what partners with comparable content offerings receive,” YouTube wrote in the blog. “Our priority is to reach a deal that reflects the value of their content and is fair for both sides without passing on additional costs to our subscribers.”
If YouTube is unable to reach a new agreement by 5 p.m. Eastern on Wednesday, the Fox channels will become unable on YouTube TV, the Google company said. YouTube pays broadcasters like Fox to carry their channels, and a blackout could have implications on advertisers and millions of viewers who cut their cords to stream Fox’s various channels on YouTube TV.
“While Fox remains committed to reaching a fair agreement with Google’s YouTube TV, we are disappointed that Google continually exploits its outsized influence by proposing terms that are out of step with the marketplace,” the media company said in a statement.
The Fox standoff represents the latest contract dispute between content companies and delivery networks as viewers increasingly ditch cable.
In February, Paramount Global notified YouTube TV subscribers that more than 20 channels including CBS, BET, Comedy Central, MTV and Nickelodeon could go dark on the service if the two didn’t reach a deal. Shortly after, YouTube TV and Paramount announced a multi-year distribution deal.
YouTube TV’s base plan costs $82.99 per month and includes over 100 live channels and unlimited cloud DVR. YouTube said a key part of its commitment to users is its partnership with content providers like Fox, “which allows us to carry a wide variety of channels.”
If Fox does go offline for an extended period of time, YouTube will give its members a $10 credit, the Google company wrote. Users will also be able to watch Fox content by signing up for Fox One, Fox’s streaming service, the blog said.
YouTube recently overtook Netflix, which has a market cap of $515 billion, as the top streaming platform in terms of audience engagement. Google does not provide official subscriber numbers for YouTube TV, but in its February 2024 letter, YouTube CEO Neal Mohan announced that the service had more than 8 million subscribers. MoffettNathanson principal analyst Michael Nathanson has estimated that YouTube TV has approximately 9.4 million paying subscribers.
WATCH: Apple and Google’s multibillion dollar search pact at risk
Elon Musk, CEO of SpaceX and Tesla, attends the Viva Technology conference at the Porte de Versailles exhibition center in Paris on June 16, 2023.
Gonzalo Fuentes | Reuters
Elon Musk‘s xAI sued Apple and OpenAI on Monday, accusing the pair of an “anticompetitive scheme” to thwart artificial intelligence rivals.
The lawsuit, filed by Musk’s AI startup xAI and its social network business X, alleges Apple and OpenAI have “colluded” to maintain monopolies in the smartphone and generative AI markets.
Musk’s xAI acquired X in March in an all-stock transaction.
It accuses Apple of deprioritizing so-called “super apps” and generative AI chatbot competitors, such as xAI’s Grok, in its App Store rankings, while favoring OpenAI by integrating its ChatGPT chatbot into Apple products.
“In a desperate bid to protect its smartphone monopoly, Apple has joined forces with the company that most benefits from inhibiting competition and innovation in AI: OpenAI, a monopolist in the market for generative AI chatbots,” according to the complaint, which was filed in U.S. District Court for the Northern District of Texas.
An OpenAI spokesperson said in a statement: “This latest filing is consistent with Mr. Musk’s ongoing pattern of harassment.”
Representatives from Apple didn’t immediately respond to a request for comment.
The Tesla CEO launched xAI in 2023 in a bid to compete with OpenAI and other leading chatbot makers.
Musk earlier this month threatened to sue Apple for “an unequivocal antitrust violation,” saying in a post on X that the company “is behaving in a manner that makes it impossible for any AI company besides OpenAI to reach #1 in the App Store.”
After Musk threatened to sue Apple, OpenAI CEO Sam Altman responded: “This is a remarkable claim given what I have heard alleged that Elon does to manipulate X to benefit himself and his own companies and harm his competitors and people he doesn’t like.”
An Apple spokesperson previously said its App Store was designed to be “fair and free of bias,” and that the company features “thousands of apps” using a variety of signals.
Apple last year partnered with OpenAI to integrate ChatGPT into iPhone, iPad, Mac laptop and desktop products.
Several users replied to Musk’s post on X via its Community Notes feature saying that rival chatbot apps such as DeepSeek and Perplexity were ranked No. 1 on the App Store after Apple and OpenAI announced their partnership.
The lawsuit is the latest twist in an ongoing clash between Musk and Altman. Musk co-founded OpenAI alongside Altman in 2015, before leaving the startup in 2018 due to disagreements over OpenAI’s direction.
Musk sued OpenAI and Altman last year, accusing them of breach of contract by putting commercial interests ahead of its original mission to develop AI “for the benefit of humanity broadly.”
In a counter claim, OpenAI has alleged that Musk and xAI engaged in “harassment” through litigation, attacks on social media and in the press, and through a “sham bid” to buy the ChatGPT-maker for $97.4 billion designed to harm the company’s business relationships.
Technology
Nvidia’s new ‘robot brain’ goes on sale for $3,499 as company targets robotics for growth
Jensen Huang, CEO of Nvidia, is seen on stage next to a small robot during the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, on June 11, 2025.
Gonzalo Fuentes | Reuters
Nvidia announced Monday that its latest robotics chip module, the Jetson AGX Thor, is now on sale for $3,499 as a developer kit.
The company calls the chip a “robot brain.” The first kits ship next month, Nvidia said last week, and the chips will allow customers to create robots.
After a company uses the developer kit to prototype their robot, Nvidia will sell Thor T5000 modules that can be installed in production-ready robots. If a company needs more than 1,000 Thor chips, Nvidia will charge $2,999 per module.
CEO Jensen Huang has said robotics is the company’s largest growth opportunity outside of artificial intelligence, which has led to the Nvidia’s overall sales more than tripling in the past two years.
“We do not build robots, we do not build cars, but we enable the whole industry with our infrastructure computers and the associated software,” said Deepu Talla, Nvidia’s vice president of robotics and edge AI, on a call with reporters Friday.
The Jetson Thor chips are based on a Blackwell graphics processor, which is Nvidia’s current generation of technology used in its AI chips, as well as its chips for computer games.
Nvidia said that its Jetson Thor chips are 7.5 times faster than its previous generation. That allows them to run generative AI models, including large language models and visual models that can interpret the world around them, which is essential for humanoid robots, Nvidia said. The Jetson Thor chips are equipped with 128GB of memory, which is essential for big AI models.
Companies including Agility Robotics, Amazon, Meta and Boston Dynamics are using its Jetson chips, Nvidia said. Nvidia has also invested in robotics companies such as Field AI.
However, robotics remains a small business for Nvidia, accounting for about 1% of the company’s total revenue, despite the fact that it has launched several new robot chips since 2014. But it’s growing fast.
Nvidia recently combined its business units to group its automotive and robotics divisions into the same line item. That unit reported $567 million in quarterly sales in May, which represented a 72% increase on an annual basis.
The company said its Jetson Thor chips can be used for self-driving cars as well, especially from Chinese brands. Nvidia calls its car chips Drive AGX, and while they are similar to its robotics chips, they run an operating system called Drive OS that’s been tuned for automotive purposes.
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