vidia’s strong growth is forecasted for the first quarter on Wednesday, signaling a booming demand for artificial intelligence chips. Even more so, the company
said that their new semiconductors were “amazing”.
The forecast from the company also helps allay doubts surrounding artificial intelligence and hardware that emerged last month as a result of DeepSeek’s claims that it had developed AI models that rivaled Western counterparts at a small part of their costs. |
Their shares rose even before declining slightly in extended trading, closing up to 3.7% in regular trading. Nvidia is one of the biggest beneficiaries of a rally in AI-linked stocks, its shares being more than 400% over the last two years.
Nvidia’s CEO Jensen Huang was more optimistic, saying, “AI is advancing at light speed. " He also added that “demand for Blackwell is amazing.” He said, “We’ve successfully ramped up the massive-scale production of Blackwell AI supercomputers, achieving billions of dollars in sales in its first quarter.”
It is also worth mentioning that Nvidia is in the process of product transition, moving to a new chip architecture called Blackwell. The company is shifting from selling individual chips to full AI computing systems, integrating graphic chips, processors, and networking equipment.
The California-based company generated nearly $11 billion in revenue from Blackwell-related products in their last quarter, meaning nearly 50% of the company’s overall data center revenue.
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Jacob Bourne, an eMarketer analyst said “Unlike previous quarters, there was heightened skepticism going into this report due to concerns about DeepSeek's efficient model and questions surrounding the Blackwell rollout” also adding “But the results have removed the doubts.”.
Even more so, the Balkwell-related ramp-up has proven complicated and costly, which has affected the company’s margins. As a result, on Wednesday, Nvidia’s forecast for the first-quarter gross margin came slightly below expectations, lowering to 71%, under the 72.2% forecast made by Wall Street.
Third Bridge analyst Lucas Koh said “Despite the breakthroughs from DeepSeek, Nvidia's momentum with Hyperscalers seems to continue” making reference to large cloud-computing companies, reported Reuters.
It is also worth mentioning that sales in the data-center segment which accounted for the majority of Nvidia’s revenue, grew 93% to $35.6 billion in the quarter that ended on January 26, coming above estimates which were $33.59 billion.
By
Eva Robinson
•
February 27, 2025 9:15 AM
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