Nvidia avoided scaring many of the sell-offs on Wall Street, partly because of another blowout earnings beat. Perhaps more importantly, the world’s largest company had plenty of good things to say about its next-generation graphics processing unit offerings. On the company’s Q3 earnings call, CEO Jensen Huang said the rollout of the new platform, known as Blackwell, has avoided major issues and will start boosting the company’s top line ahead of schedule.
On the call, Huang brushed aside engineering reports that Nvidia is on track to beat its first Q4 estimates for Blackwell’s sales (it previously said the platform would initially generate several billion dollars in additional revenue). will calculate). Huang expressed overwhelming demand for the new offering, which promises to dramatically increase AI data center performance.
He said that Blackwell’s production is in full swing.
There is broad consensus that Blackwell will be a game changer, but the road to market has not been without recent hiccups. Several analysts have stated. good luck That production snags, which delayed Blackwell’s release by at least a quarter, was no surprise. However, earlier this week, Information Nvidia reportedly asked suppliers to adjust the platform’s server rack design multiple times in recent months due to overheating issues.
While Huang did not specifically address the report, he said he believes the Blackwell ramp is in very good shape.
“It pretty much threw cold water on all those concerns,” said Angelo Zeno, a senior vice president and technical analyst at CFRA Research. good luck after the call.
AI CapEx isn’t going anywhere, Huang says.
Analysts on the earnings call also received assurances from Huang that demand will outpace supply for at least several more quarters. The first question the CEO tackled is related to the growing debate about whether growth in major language models has stalled. This claim is made by the likes of Meta’s Chief AI Scientist, Yan Liquan, who suggested that higher amounts of more powerful chips would not be enough to produce more breakthroughs.
Huang tried to address these concerns. The most recent large AI models require as many as 100,000 Nvidia “Hopper” chips, previously the company’s largest offering, he said.
“The next generation starts with 100,000 black whales,” he said.
Huang cited a number of customers who are already on board with the platform, including the likes of Google, Dell and Oracle. Chief Financial Officer Colette Cress said Microsoft has seen more than two times the performance increase over Hopper.
“Demand for Blackwell is staggering, and we are racing to scale supply to meet incredible customer demand,” he said.
That said, the company’s $37.5 billion revenue forecast for Q4, a slight beat on the Street consensus, was somewhat conservative. That sent the stock down slightly in after-hours trading before the shares recovered losses on Thursday.
A muted forecast, he added, could set up even stronger earnings in late February.
Not surprisingly, this view is shared by Wall Street’s most prominent tech bulls. Dan Ives of Wedbush Securities said Huang’s bullish commentary should send the stock’s bears into hibernation mode.
“Nvidia and Jensen will continue to underpromise and overdeliver,” he wrote in a note Thursday..
So far, that’s been a good recipe for shares that have appreciated 850% over the past two years.
