Nvidia (NASDAQ: NVDA) reported yet another strong quarter, with Q3 fiscal 2025 revenue soaring 94% year-over-year to $35.1 billion, driven largely by its data center segment, which grew 112% to $30.8 billion. Despite these impressive numbers, the real standout lies in Nvidia’s data center compute revenue, which increased 132% year-over-year to $27.6 billion and 22% sequentially, far outpacing the company’s overall 17% sequential growth.

Data Center Compute Dominates

Nvidia separates its data center revenue into compute (processors, memory chips) and networking (switches, routers). Compute, which powers AI training and inference, is the core driver:

  • Compute Revenue: $27.6 billion (+132% YoY, +22% sequentially)
  • Networking Revenue: $3.1 billion (+20% YoY)

This sequential acceleration (17% in Q2 to 22% in Q3) reflects Nvidia’s dominance in AI and its unmatched product suite, including GPUs, DPUs, software, and its DGX Cloud AI training platform.

Data center compute revenueYear-over-year growthSequential growthDollar Amount (in billions)
Q2 2024171%141%N/A
Q3 2024324%38%N/A
Q4 2024488%27%N/A
Q1 2025478%29%$19.4
Q2 2025162%17%$22.6
Q3 2025132%22%$27.6
Source: Nvidia filings. (Note: compute revenue was not reported in fiscal 2024)\Yahoo.Finance

Challenges and Opportunities

Despite the robust growth, Nvidia faces supply constraints, particularly for its Blackwell platform, which management expects will persist for several quarters. However, this demand-supply mismatch underscores the immense appetite for its products.

Outlook

For Q4, Nvidia projects revenue growth of 70% year-over-year, with sales reaching $37.5 billion (+/- 2%). While some investors viewed this guidance as conservative, Nvidia’s track record suggests it could beat expectations once again.

Key Takeaways

  • Nvidia’s data center compute revenue is the engine behind its explosive growth, contributing 88% of total revenue.
  • Sequential growth acceleration signals continued momentum, with strong demand for AI-driven products.
  • While year-over-year growth is decelerating, sequential trends and demand for the Blackwell platform point to sustained growth.

Nvidia remains a leader in the AI and data center space, and its stellar results suggest there’s little slowing its momentum.

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