Nvidia earnings recap: Jensen Huang shouts out strong Blackwell demand and DeepSeek as company beats estimates

"DeepSeek R1 has ignited global enthusiasm," he says.

"It's an excellent innovation, but even more importantly, it has open-sourced a world-class reasoning AI model, or chain of thought and reinforcement learning techniques," he adds.

Nvidia will talk more about Blackwell Ultra and Rubin at the company's GTC AI developer conference, which kicks off on March 17.

Nvidia's stock price dipped into the red as the analyst call concluded.

Wall Street has clearly zeroed in on Nvidia's gross margin pressure amid Blackwell's production ramp and the question of potential tariff impact.

CFO Kress says gross margins are "quite complex in terms of the material." She says once Blackwell ramping is complete, the company can work on improving its margins.

Speaking about tariffs and their potential impact, Kress says the timing and amount of tariffs are "a little bit of an unknown."

"It's an unknown until we understand further what the US government's plan is," Kress says.

Kress says the company will "always follow export controls and or tariffs."

Referencing Nvidia's guidance, "China is approximately the same percentage as Q4 and as previous quarters," Huang says. "It's about half of what it was before the export control, but it's approximately the same percentage with respect to with respect to geographies."

AI chips are best thought of as software, he adds — everywhere and in every country.

"Every student will have used AI as a tutor," Nvidia's CEO says.

"No fintech company will not use AI," he adds, rattling off more examples of what he envisions for AI's growth across all industries.

Huang talks about the "hiccup" that happened during Nvidia's early production of Blackwell "that probably cost us a couple months."

The company recovered "at the speed of light," he added and learned from the experience ahead of production of Blackwell Ultra.

He says the "next train" is on an "annual rhythm."

"We've been working with all of our partners and customers laying this out, they have all of the necessary information, and we'll work with everyone to do the proper transition," he adds.

"This was a very challenging transition," Huang says of Blackwell, but he expects the eventual transition to Blackwell Ultra to go smoother.

He says the transition to Blackwell Ultra will be smoother because the chip architecture is the same. He says it was a lot more challenging to go from Hopper to Blackwell than it will be to go from Blackwell to Blackwell Ultra.

Analysts at Mizuho said that while they expect Nvidia to report an "in-line" earnings report, they also expect some "growing pains."

"Our checks indicate that while JanQ DC is expected in-line, AprilQ could be more flattish as near-term ramps remain modest given GB200 power/cooling requirements," Mizuho said in a note last week.

DC refers to Nvidia's data center revenue, which encompasses its GPU chip sales.

For Mizuho, the focus is on the second half of the year, as it expects a "strong" Blackwell ramp to make up for any lost revenues in the first half of the year.

"We continue to see NVDA driving strong industry leadership with its CUDA ecosystem, on top of its integrated HW platform where it has strong customer relationships," Mizuho said, adding that it expects key customers Microsoft, Amazon, and Alphabet to turbocharger their Blackwell GPU purchases later this year.

Mizuho rates Nvidia at "Outperform" with a $175 price target.

Analysts at Wedbush said the big question going into earnings is whether it will be another "$2 billion beat and $2 billion raise" quarter. The firm thinks they can pull it off.

"We expect another robust performance and 'clear beat and raise special' from Nvidia that should calm the nerves of investors as Jensen lays out the massive demand drivers from Blackwell and AI Capex in the field fueling this 4th Industrial Revolution," Wedbush said.

Wedbush said that based on its channel checks, a single AI enterprise deployment has not slowed or changed because of DeepSeek.

"No customer wants to 'lose their place in line' as it is described to us for Nvidia's next gen chips," Wedbush said.

Analysts at Bank of America expect Nvidia to beat earnings estimates and said they see the company's calendar year 2025 data center revenue surging 60% year-over-year.

"Despite DeepSeek's supposed "revolutionary" optimizations, there is no change thus far to spending intentions at NVDA large customers including Microsoft and Meta," Vivek Arya, an analyst at Bank of America, said in a note earlier this month.

Arya said that optimizations in hardware and software are "key parts of computing," so he doesn't expect DeepSeek efficiencies to lead to a reduction in sales for the company.

Looking past earnings, Arya said Nvidia's GTC conference in March is the next big catalyst. That's where the investor focus for Nvidia could shift away from Blackwell and toward its next-generation products, including the Rubin GPU and solutions for autonomous robots.

Bank of America rates Nvidia at a "Buy" with a $190 price target.

Nvidia is likely to meet fourth-quarter revenue expectations and raise its first-quarter guidance "amid a significant ramp-up in its Blackwell GPUs," Kunjan Sobhani, tech analyst at Bloomberg Intelligence, said last week.

Sobhani said Nvidia has overcome some recent supply-chain delays and concerns about hyperscaler demand, as evidenced by its stock price fully recovering the DeepSeek losses.

"Initial shipments to key customers began in 4Q and will increase through 1Q26," Sobhani said. "Increased capital-spending guidance from Meta, Microsoft, Amazon Web Services and Google aids our confidence in near-term sales."

Encouragingly, Sobhani said Nivida's profit margins could "return to the mid-70s" in the second half of the year after declining due to the Blackwell production ramp.

4th quarter

• Revenue estimate: $38.25 billion

• Data center revenue estimate: $34.06 billion

  • Compute revenue estimate: $30.17 billion
  • Networking revenue estimate: $3.57 billion
• Gaming revenue estimate: $3.02 billion
• Professional Visualization revenue estimate: $507.3 million
• Automotive revenue estimate: $459 million
• Adjusted gross margin estimate: 73.5%
• R&D expenses estimate: $3.75 billion
• Adjusted operating expenses estimate: $3.4 billion
• Adjusted operating income estimate: $24.69 billion
• Adjusted EPS estimate: 84c

1st quarter

• Revenue estimate: $42.26 billion
• Adjusted gross margin estimate: 72.1%
• Adjusted operating expenses estimate: $3.62 billion
• Capital expenditure estimate: $760 million

Source: Bloomberg data