Why Is Nvidia Stock Price Falling Despite Posting a Record 114% Revenue Growth in 2024 to £103.3B

Nvidia Corp.'s (NASDAQ:NVDA) full-year 2024 revenue soared by a record 114% year-over-year (YoY) to £103.3 billion despite concerns of waning AI momentum in the US following the £1 trillion market sell-off triggered by China's DeepSeek AI Model launch in January.

Nvidia's earnings report and guidance published yesterday hinted that it can sustain its historic AI-driven growth rally for the remainder of 2025. The chipmaker's full-year revenue was buoyed by meteoric growth in Blackwell AI chip sales as well as data centre and automotive segments.

For the quarter ended 26th January, Nvidia's revenues jumped 78% YoY to a record £31.1 billion. Around £8.7 billion of Q4 revenues came from Blackwell AI GPU sales.

'Demand for Blackwell is amazing as reasoning AI adds another scaling law — increasing compute for training makes models smarter and increasing compute for long thinking makes the answer smarter,' said Nvidia CEO Jensen Huang.

'We've successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter. AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionise the largest industries,' he added.

Nvidia Stock Tanks Amid Gross Margin Concerns

For the current quarter, the company forecast revenues to reach another milestone of £34.03 billion. However, the stock price tanked by 3.6% on 27th February as investors flagged Nvidia's 71% gross margin guidance for Q1, which is lower than its 73% print in Q4.

Truist Securities analyst William Stein said investors are 'yawning' despite the earnings beat. Meanwhile, analyst Cody Acree said the Q1 gross margin guidance was a little concerning because it could signal pricing pressure and growing competition.

However, Acree noted that the demand for Nvidia products remains strong, which is key for the company going forward.

Nvidia's Data Center, Automotive Revenue Leaps On Surging AI Demand

Nvidia also attributed the monumental revenues to massive growth in its data centre business.

In 2024, the data centre segment generated £91.19 billion, a 142% leap from 2023 revenues. Quarterly revenues jumped 93% YoY.

Nvidia announced that major cloud service providers like AWS, Google Cloud Platform, Microsoft Azure, and Oracle Cloud Infrastructure are bringing Nvidia GB200 systems to the cloud globally to catch up with the growing customer demand for AI.

Meanwhile, Cisco decided to integrate NVIDIA Spectrum-X into its networking portfolio to enable enterprises to develop next-gen AI infrastructure.

Elsewhere, Q4 revenues from the automotive and robotics segment soared 103% YoY to £451.2 million. Although a small fraction of Nvidia's AI business, the segment generated £1.34 billion in 2024, a 54% increase from the prior year.

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