Essential Five-Word Insights from Jensen Huang that Every Nvidia Shareholder Shouldен Consider Prior to Nov. 20.
Essential Five-Word Insights from Jensen Huang that Every Nvidia Shareholder Shouldен Consider Prior to Nov. 20.
With a market cap of $3.6 trillion, Nvidia (NVDA 1.37%) currently holds the title as the globe's largest corporation. Over the past two years alone, it has accounted for a staggering $3.2 trillion of this value primarily due to the escalating demand for its top-tier data center graphics processing units (GPUs), which are renowned globally for their prowess in developing artificial intelligence (AI) models.
Nvidia is slated to disclose its financial results for its fiscal 2025 third quarter (which concluded on Oct. 31) on Nov. 20, and industry experts predict record revenue, primarily driven by its data center segment.
During an interview with CNBC last month, Nvidia CEO Jensen Huang made a series of optimistic statements regarding the company's new Blackwell GPU architecture. Particularly noteworthy were five words that should leave every Nvidia stock investor in high spirits leading up to Nov. 20.
Blackwell chips poised to revolutionize AI development
Artificial intelligence model development requires substantial computational resources, and most companies cannot feasibly establish the necessary data centers due to the exorbitant cost of chips. Throughout most of last year, Nvidia's H100 was the go-to GPU for AI development in data centers, but a single unit could set you back up to $40,000. Some AI applications required thousands of these expensive GPUs.
To circumvent these costs, tech giants such as Microsoft and Amazon have established centralized data centers and lease the computing capacity to enterprises. This business model is both profitable for them at scale and makes AI financially accessible to enterprises that cannot construct their own infrastructure.
Nvidia's new Blackwell architecture offers a substantial boost in performance. The Blackwell-based GB200 NVL72 GPU system can perform AI inference 30 times faster than the equivalent H100 system. Indeed, each individual GB200 GPU retails for between $30,000 and $40,000 - virtually the same price as the H100 when it initially launched.
This surge in cost efficiency means that the most advanced AI models will become financially viable for a broader range of businesses and developers.
Tech giants up the ante on AI investment
Rumor has it that Microsoft has already emerged as the chief buyer of Blackwell GPUs. During its fiscal 2025 first quarter (which ended on Sept. 30), Microsoft allocated an astounding $20 billion to capital expenditures (capex) - a substantial portion of which was dedicated to AI data centers and chips.
Similarly, Amazon spent an impressive $30.5 billion on AI infrastructure within the first half of 2024, and it projects spending nearly $45 billion in the second half, culminating in an annual investment of $75 billion.
Meta Platforms – which constructs AI data centers for its own purposes – is planning to invest up to $40 billion in infrastructure this year, with even further spending scheduled for 2025. Microsoft, Amazon, and Meta are just a few of Nvidia's many high-profile clients.
Nvidia poised for record-breaking revenue in Q3
Nvidia recorded a total revenue of $30 billion during its fiscal 2025 second quarter (which ended on July 28), representing a 122% increase from the previous year. This included $26.3 billion in data center revenue, which experienced a remarkable 154% growth.
Nvidia's projections suggest $32.5 billion in total revenue for Q3, but the current Wall Street consensus estimate (courtesy of Yahoo) stands at $32.9 billion. This means that the company's own forecasts may be overly conservative.
Given that Nvidia frequently surpasses Wall Street's expectations, I predict that total revenue will surpass $32.9 billion when the company reports on Nov. 20. In this scenario, the influence of Blackwell may be significant.
Five game-changing words from Jensen Huang
Huang appeared on CNBC on Oct. 10, and he made numerous positive remarks about Blackwell. However, these five words should leave every investor exhilarated: "Demand for Blackwell is insatiable."
He also revealed that the new chips are being produced as planned and elaborated on how every tech company seeks to be the first and has a strong desire to have the most.
Shipments of Blackwell GPUs to customers have already begun to ramp up. According to Morgan Stanley, Nvidia may sell up to 300,000 GB200 GPUs in the calendar fourth quarter of 2024, which not only includes October but could equate to billions of dollars in Blackwell revenue in Nvidia's forthcoming report on Nov. 20.
Morgan Stanley also suggests that shipments could escalate to an astounding 800,000 units in the first three months of 2025. In this context, sales growth is expected to soar exponentially.
Thus, investors who already own Nvidia stock may wish to hold onto it through Nov. 20 (and beyond). Moreover, I foresee Nvidia stock outperforming all of its trillion-dollar peers in terms of returns next year, which may prompt investors who do not currently own it to consider investing.
- With the anticipated high demand for Blackwell GPUs, Nvidia is expected to see significant revenue growth in its investing activities, as major tech companies such as Microsoft and Amazon increase their investments in AI.
- The insatiable demand for Nvidia's new Blackwell GPUs, as mentioned by CEO Jensen Huang, could potentially lead to record-breaking revenue for the company, especially considering the high demand from tech giants for cost-efficient AI computational resources.