Artificial intelligence (AI) leader Nvidia (NASDAQ: NVDA) had a strong 2024. During the year, analysts debated how high its data center revenue could grow as it rolled out new products. Hyperscaler customers kept increasing capital spending to build out data center compute power. But things turned on a dime in January 2025 when Chinese hedge fund-owned DeepSeek dropped an AI bombshell regarding resources needed to do AI well.
Rather than wondering how Nvidia's latest AI chip sales were going, some investors cared more about how to invest in DeepSeek and its claims that it created a high-performing large language model (LLM) with just $6 million in capital. The news led to an 11% decline in Nvidia stock thus far in 2025. But questions remain about DeepSeek and its claims, and investors would be smart to focus on what Nvidia says in its next earnings report (due on Feb. 26).
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Data centers and more
Before the DeepSeek news, all eyes were on Nvidia's unprecedented revenue growth -- specifically, in its data center segment. The unsustainable rate of growth was slowing, though, and Nvidia's share price had already rocketed higher as those sales soared.
If spending on generative AI infrastructure comes to a screeching halt, as some have surmised from the DeepSeek news, the quarter-over-quarter growth in Nvidia's data center revenue should quickly reverse. As seen below, it appeared to begin stabilizing at a mid-teens growth rate in the last quarter.
| Quarter-Over-Quarter Data Center Revenue Growth | |||||
| Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 |
| 141% | 41% | 27% | 23% | 16% | 17% |
Source: Nvidia. Note: Fiscal 2025's Q3 ended Oct. 27, 2024.
That's the number I'll continue to watch to see if Nvidia's share price can recoup recent losses and more -- at least in the short term. Nvidia also has other irons in the fire for the long term.
Data source: Nvidia. Chart by author.
The company's auto and robotics segment will be the next area to watch. That revenue pales in comparison to the data center but could be the next impactful growth catalyst for Nvidia.
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Howard Smith has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
