Nvidia (NVDA -2.49%) once again hit the ball out of the park in its most recent quarter, as revenue and net income soared in the triple digits. That, and the announcement of an upcoming stock split, helped the shares to surge above $1,000.
The company reported $26 billion in revenue in the fiscal 2025 first quarter, thanks to demand for its artificial intelligence (AI) chips and related products and services. That's huge. But how much of this enormous amount is actual profit?
Image source: Getty Images.
Nvidia's AI chip dominance
First, this isn't a one-time event for the chip designer. Nvidia dominates the AI chip market, and this has helped the company report billions of dollars in earnings over the past few years. Ever since the start of the AI boom, Nvidia's earnings and stock price have been roaring higher, led by sales to customers in the AI space.
Let's take a look at the chart, below. It shows Nvidia's $26 billion in revenue, as well as the expenses and income taxes that chip away at that figure. As a result, as also shown in the chart, Nvidia's net income is about $14.9 billion. So more than $11 billion is flowing out of Nvidia's coffers in order to support its growth (and take care of standard obligations, like taxes).
Data source: Nvidia.
What does this mean for the company and its investors? Nvidia must continue to spend on research and development and other areas to ensure its market dominance -- but it must keep the spending at levels that don't threaten profitability. So far, the company has done a great job in that area as we can see in the chart, and this should please investors.
This suggests that, if demand continues at high levels, Nvidia's earnings could continue to climb. Nvidia makes a great stock to buy right now and hold for the long term as the AI growth story enters its next chapters.
