Nvidia Poised to Surpass Financial Expectations with New Technology
With a market capitalization of $3.6 trillion, Nvidia (NASDAQ: NVDA) stands as the world’s largest company. Over the past two years, it has amassed $3.2 trillion in value, driven by soaring demand for its data center graphics processing units (GPUs), which are crucial for developing artificial intelligence (AI) models.
The company plans to announce its financial results for the fiscal 2025 third quarter, ending October 31, on November 20. Analysts predict it will report record revenue primarily from its data center segment.
Blackwell GPUs Set to Transform AI Development
Creating AI models demands significant computing power, but many businesses struggle to build the necessary data centers due to the high cost of chips. For most of last year, Nvidia’s H100 model was the standard GPU for AI purposes, with prices reaching up to $40,000 per unit. Some AI applications required tens of thousands of these GPUs.
This high expense has driven major tech companies such as Microsoft and Amazon to construct centralized data centers and lease capacity, making AI more affordable for businesses that cannot afford their own infrastructure.
Nvidia’s new Blackwell GPU architecture promises a dramatic increase in performance. Specifically, the Blackwell-based GB200 NVL72 GPU can perform AI inference at 30 times the speed of an H100. Each GB200 unit is priced between $30,000 and $40,000, similar to the original price of the H100 upon its introduction.
This development could greatly enhance cost efficiency, allowing a broader range of businesses and developers to access advanced AI models.
Major Corporations Increasing AI Investments
Reports suggest that Microsoft is currently the top buyer of Blackwell GPUs. In its fiscal 2025 first quarter, which ended September 30, Microsoft allocated $20 billion to capital expenditures (capex), primarily for AI-related data centers and chips. This follows $55.7 billion spent during fiscal 2024.
Amazon is also heavily investing, reportedly spending $30.5 billion on AI infrastructure in the first half of 2024, with plans to invest nearly $45 billion in the latter half, totaling $75 billion for the year.
Meta Platforms is investing as well, planning to spend up to $40 billion on infrastructure in 2024, with further investment anticipated in 2025. Microsoft, Amazon, and Meta are some of Nvidia’s key customers.
Image source: Nvidia.
Nvidia Expected to Report Record Revenue in Q3
Nvidia recorded $30 billion in revenue during its fiscal 2025 second quarter, which ended July 28, representing a 122% increase from the previous year. This included $26.3 billion in revenue from its data center segment, a 154% increase from the prior year.
The company anticipates $32.5 billion in revenue for Q3, though Wall Street analysts estimate it may reach $32.9 billion, suggesting Nvidia’s projections could be conservative.
Given Nvidia’s history of exceeding expectations, it is likely that total revenue may surpass $32.9 billion when the results are released on November 20. If this occurs, Blackwell could significantly contribute to this upward trend.
Jensen Huang’s Enthusiasm for Blackwell
During a CNBC interview on October 10, CEO Jensen Huang made several optimistic remarks about Blackwell. Notably, he stated, “Demand for Blackwell is insane,” which should excite investors.
Huang clarified that Blackwell chips are in full production and highlighted that all tech customers aim to be first adopters.
Shipments of Blackwell GPUs are already increasing. Morgan Stanley estimates Nvidia may sell up to 300,000 GB200 GPUs in the fourth quarter of 2024, signaling substantial revenue from Blackwell in the upcoming report.
The bank also projected that shipments could surge to 800,000 units in the first quarter of 2025, indicating rapid sales growth.
For Nvidia stockholders, holding through November 20 could be wise, as the company may outperform other trillion-dollar firms in the coming year. Investors who do not yet own Nvidia may want to consider entry points before the price potentially rises.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, serves on The Motley Fool’s board of directors. Randi Zuckerberg, a prior director of market development at Facebook, is also a board member. Anthony Di Pizio has no positions in any mentioned stocks. The Motley Fool has stakes in and recommends Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
