Nvidia earnings, share price show AI-giant is on track to achieve historic $5 trillion market valuation feat

Nvidia earnings results were out on Wednesday and data showed that the US Chipmaker is well on track to reach $5 trillion market valuation. Nvidia Corporation became the first company reach a stagger market valuation of $4 trillion. Nvidia shares have gained more than a third so far in 2025, outpacing the benchmark S&P 500 Index's year-to-date rise of nearly 10 per cent. Nvidia’s total market value as of the close of trading Wednesday was $4.429 trillion, tops in the S&P 500. Microsoft with $3.767 trillion and Apple with $3.421 trillion are next among the most valuable companies in the S&P 500. Nvidia’s market value in late August 2023 was around $1.150 trillion. A jaw-dropping 1,143 per cent is the approximate gain in Nvidia’s stock price since the start of 2023. The shares are up about 35 per cent so far this year.

Nvidia Earnings Results

On Wednesday, Nvidia forecast third-quarter revenue above Wall Street estimates, helped by robust demand for its artificial intelligence chips from cloud providers expanding infrastructure to power generative AI technology. The AI market bellwether expects revenue of $54 billion, plus or minus 2 per cent, in the third quarter, compared with analysts' average estimate of $53.14 billion, according to data compiled by LSEG. The company said it has not assumed any shipments of its H20 chips to China in the outlook.


But the company has been caught in the crossfire of the trade war between Washington and Beijing, as the world's two largest economies claw for dominance of generative AI technology. The company said it had not assumed any H20 chip shipments to China in the outlook and that there were no H20 sales to China-based customers in the second quarter.

Still, demand has surged for Nvidia's advanced chips that can speedily process the large amounts of data used by generative AI applications as businesses race each other to dominate the new technology.

Big Tech companies including Meta Platforms and Microsoft have been spending liberally to support their AI ambitions, and Nvidia is the biggest beneficiary, with a significant chunk of this spending funneled toward its chips.

The company said that about half of its $41 billion in data center revenue came from large cloud service providers during its fiscal second quarter.

Enthusiasm for AI stocks, centered around Nvidia as Wall Street engaged in picks-and-shovels trading, has been the dominating force behind the rally of the S&P 500 Index over the last two years.

Nvidia H20 Chips

In an unprecedented deal with U.S. President Donald Trump, Nvidia has agreed to pay the government 15 per cent of some of its revenue in China in exchange for a reversal of restrictions that curbed sales of its H20 chips to China. But Beijing has cautioned domestic companies about imports and sources said that Nvidia has halted production of H20 chips.

Nvidia had in May expected the curbs to shave off $8 billion in sales from the July quarter. The company reported revenue of $46.74 billion for the second quarter, beating estimates of $46.06 billion.

FAQs

Q1. How have Nvidia shares performed?
A1. Nvidia shares have gained more than a third so far in 2025, outpacing the benchmark S&P 500 Index's year-to-date rise of nearly 10 per cent.

Q2. What is Nvidia's current position on sale of H20 chips to China?
A2. Nvidia said it has not assumed any shipments of its H20 chips to China in the outlook.