Nvidia’s Future Growth Hinges on Blackwell Chip Success
The tech giant’s recent quarterly sales surge has left investors wondering how long this growth spurt will last. The answer lies in Blackwell, Nvidia’s next-generation AI chip, which is expected to drive revenue to unprecedented heights.
Production in Full Swing
CEO Jensen Huang and CFO Colette Kress reassured investors that Blackwell’s rollout is on track, with production in full swing. The company is set to deliver more Blackwell chips this quarter than initially estimated, with 13,000 units already shipped to customers, including Microsoft, Oracle, and OpenAI.
Early Adopters Get a Head Start
These early shipments are sample chips, designed to allow customers to test and prepare their systems for the impending volume shipments. The real bulk of shipments will commence in Nvidia’s current quarter, with Huang promising that the company will ship more Blackwells next quarter and even more the quarter after that.
Supply Chain Constraints
However, the limiting factor in producing more Blackwell systems is the availability of components from Nvidia’s suppliers. The company is working closely with partners like TSMC, Amphenol, Vertiv, SK Hynix, and Micron to meet the overwhelming demand.
Gross Margins to Increase
While Blackwell’s gross margins will be lower in the coming months, Nvidia expects them to increase as the product matures. The company offers Blackwell in various configurations, including standalone chips and entire rack systems, which will contribute to its growing revenue.
The AI Revolution Takes Off
Nvidia’s message is clear: Blackwell is in short supply because companies like OpenAI need the fastest GPUs available to develop next-generation AI models. As Blackwell rolls out, Nvidia’s current AI chips, Hopper, will focus on serving AI models, not creating new ones. The company predicts that Blackwell sales will eventually surpass those of Hopper.
A New Era of Growth
With Blackwell leading the charge, Nvidia is poised to enter a new era of growth. The company’s ability to meet the demand for its cutting-edge AI chips will be crucial in sustaining its momentum. As the AI revolution gains pace, Nvidia is well-positioned to reap the benefits, with Blackwell at the forefront of its strategy.
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