Nvidia's Annual Profit Surges 43 Times Higher Than AMD's
Thu 27th Feb, 2025
Nvidia has reported a staggering annual profit that is 43 times greater than that of its competitor, AMD. The company continues to thrive financially, although it faces challenges in the graphics card market due to a scarcity of available GPUs. In the latest financial results, Nvidia is on track to achieve nearly $40 billion in revenue for a single quarter, closing its fiscal year 2025 with a total revenue of $130.5 billion. From this, Nvidia recorded an operational profit of $81.5 billion and a net profit of $72.9 billion, reflecting an impressive year-on-year increase of between 114% and 147%. To put this into perspective, Nvidia's net annual profit far exceeds that of AMD, showcasing the company's robust financial health. In contrast, Intel struggles with losses that pale in comparison to Nvidia's figures. Nvidia's operating cash flow for the year has risen by 44%, reaching $16.6 billion. The driving force behind these impressive numbers is Nvidia's AI accelerators, which continue to gain traction in the market. CEO Jensen Huang noted that the latest Blackwell architecture, featuring the B100 and B200 GPUs, has contributed significantly to the company's revenue. While Nvidia's overall revenue growth has slowed slightly to a 12% increase in the last quarter, down from previous quarters that saw growth rates of 15% to 18%, sales of AI accelerators surged by 18% to $32.6 billion within just three months. However, revenue from network products, following Nvidia's acquisition of Mellanox, has slightly declined by 3% to $3 billion. One of the most significant drops in revenue has been in Nvidia's GeForce graphics cards, which experienced a 22% decrease, bringing in $2.5 billion. The company's Chief Financial Officer, Colette Kress, acknowledged that there is a limited supply of the Blackwell and Ada GPUs. The high-end RTX 4000 series graphics cards have been sold out, and availability of the new RTX 5000 series remains minimal. Nvidia is also investing heavily in research and development, allocating $3.7 billion in the fourth quarter and a total of $12.9 billion for the entire fiscal year. These figures reflect an increase of approximately 50% compared to the previous year. Despite the high profit margins, Nvidia's net margin has seen a slight decline, dropping from 74.6% to 73% over the last quarter. The company anticipates that this margin may fall below 71% in the current fiscal quarter due to rising production costs associated with current server products. Additionally, Nvidia is incurring substantial expenses related to share buybacks. Looking forward, Nvidia projects a revenue increase in the current quarter, estimating sales to reach around $43 billion, which would signify a growth of approximately 9% compared to the last quarter. The comparison with previous years has become less relevant, as the focus now hinges on the number of AI accelerators that Nvidia can manufacture and sell. Following the release of these results, the stock market has shown a positive but not overly surprised reaction, with Nvidia's shares fluctuating between a 1% and 3% increase in after-hours trading. This steady growth underscores Nvidia's position as a leader in the tech industry, particularly in the fields of AI and graphics processing.
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