Jensen Huang dispels supply and demand concerns from Blackwell, NVIDIA stock hits a new high

According to the Zhitong Finance APP, at the earnings conference, NVIDIA (NVDA.US) CEO Jensen Huang assured investors that its new product line, the Blackwell architecture AI GPU series, will continue to lead the significant expansion trend driven by the AI boom, effectively dispelling Wall Street's concerns about Blackwell's capacity and demand, pushing NVIDIA's stock price to a historic high of $152.89 during Thursday's trading session, lifting most chip stocks. Jensen Huang stated that the design flaws of the Blackwell series products have been completely resolved, and they are now "fully in production," set to ship this quarter, with plans to accelerate supply in the coming year, emphasizing that the demand for this highly anticipated high-performance AI GPU series is "very strong," with demand expected to far exceed supply for several consecutive quarters.

The Blackwell architecture AI GPU series is the core catalyst that enables NVIDIA to maintain or even accelerate its unparalleled performance growth over multiple quarters, thus attracting significant attention from Wall Street. Following the release of a strong quarterly earnings report, CEO Jensen Huang stated that the highly anticipated Blackwell series products will ship this quarter, and demand is "very strong." However, NVIDIA's management, including Jensen Huang, also indicated that the mass production of these cutting-edge chips and some unexpected engineering costs will put pressure on NVIDIA's profit margins.

Additionally, NVIDIA's official revenue forecast for the current fiscal quarter does not align with some of Wall Street's extremely stringent predictions, leading some analysts to question whether the dizzying growth is beginning to have limitations, which also caused NVIDIA's stock to drop significantly in after-hours and pre-market trading following the earnings report, with a decline of over 3% at one point during Thursday's trading session. However, the market's positive expectations for Blackwell's supply and demand ultimately outweighed the negative impact of the stringent revenue outlook .

Jensen Huang's optimistic remarks regarding Blackwell's capacity and demand expectations, combined with NVIDIA's still unparalleled quarterly performance, and an increasing number of analysts firmly believing that "the revenue outlook provided by management is conservative" ultimately triggered a moderate response from investors, with NVIDIA's stock rising 0.53% on Thursday, closing at $146.670, and reaching a historic high during the session. Although NVIDIA's stock briefly retraced over 3%, it quickly recovered, demonstrating the strong "buying on dips" power.

In 2024, driven by the global "AI faith," AI believers propelled NVIDIA's stock price to nearly double, making it the highest-valued company in the world, while in 2023, NVIDIA's stock price had already surged over 240%. After experiencing dizzying increases, any degree of underwhelming performance, apart from continuous explosive growth, is bound to disappoint.

NVIDIA expects total revenue for the fourth fiscal quarter (ending January next year) to reach approximately $37.5 billion, with a fluctuation of 2%. Data compiled by institutions shows that although Wall Street analysts' average forecast is $37.1 billion, some analysts have a maximum forecast of $41 billion. The latest financial report data shows that for the third fiscal quarter of 2025, ending October 27, NVIDIA's total revenue surged 94% year-on-year, reaching a historic high of $35.1 billion. Under GAAP standards, NVIDIA's Q3 net profit surged 109% year-on-year to $19.3 billion.**

The data center business unit, currently NVIDIA's most core business segment, provides the H100/H200 and Blackwell architecture AI GPUs that offer incredibly powerful AI computing infrastructure for data centers worldwide. The financial report shows that as the global wave of AI deployment is in full swing, this business unit's revenue increased by 112% year-on-year, reaching an astonishing $30.8 billion. This figure significantly exceeded Wall Street's expectations and surpassed the combined revenue of Intel and AMD.

NVIDIA's performance in recent years has consistently beaten Wall Street expectations. Over the past five years, NVIDIA has only once failed to meet the average expectations of Wall Street analysts in a quarterly performance. Moreover, in recent quarters, its actual total revenue has even exceeded Wall Street's expectations by at least 20%, which has led analysts to set very high performance expectations for it in recent quarters. However, NVIDIA has consistently exceeded these expectations, highlighting that as major generative AI applications like ChatGPT and Sora continue to emerge, human society is gradually entering the AI era, and the demand from global enterprises and core government departments for the most essential infrastructure of artificial intelligence (AI)—NVIDIA's high-performance AI GPUs—is experiencing explosive growth.

Jensen Huang exclaims that Blackwell demand is "incredible," and it is now in full production

Jensen Huang stated that the Blackwell series products are now in the "full production" stage, and the market demand for the previous Hopper architecture products (i.e., H100/H200) remains strong.

In the earnings statement, Jensen Huang exclaimed that the market demand for Blackwell and Hopper is "incredible." "The AI era is advancing comprehensively, driving the global transition to NVIDIA's computing power." "As foundational model manufacturers expand the deployment scale of AI pre-training, post-training, and cloud AI inference computing power, the demand for Hopper and the anticipated demand for fully produced Blackwell is—unbelievable." NVIDIA's CFO also revealed that in the third quarter, they delivered 13,000 initial open AI Blackwell engineering samples to customers, aiming to allow them to start testing and prepare their AI server systems and software for "mass shipments starting this quarter."

"Artificial intelligence is changing every industry, every company, and every country," "With the comprehensive breakthroughs in physical artificial intelligence, investments in industrial AI robotics are surging, and countries have realized the importance of developing their own sovereign-level AI large models and infrastructure." Jensen Huang stated in the earnings statement. "The AI era has arrived; it is vast and diverse." “ NVIDIA's latest revenue outlook seems to indicate a slight slowdown in growth, but this may be a conservative forecasting strategy adopted by NVIDIA.” said Alvin Nguyen, an analyst at Forrester Research. “In the short term, there is no need to worry about the demand for artificial intelligence. NVIDIA is doing everything they should be doing.”

In the MLPerf Training benchmark tests, Blackwell's performance in the GPT-3 pre-training task is twice that of Hopper per GPU. This means that with the same number of GPUs, model training can be completed faster using Blackwell. For the LoRA fine-tuning task of the Llama 2 70B model, Blackwell's performance is 2.2 times better than Hopper per GPU, indicating that Blackwell is more efficient in handling specific high-load AI tasks. In MLPerf Training v4.1, Blackwell's performance in graph neural networks and Text-to-Image benchmark tests is 2 times and 1.7 times better than Hopper per GPU, respectively.

Investment institutions such as UBS and Citigroup are very optimistic about the future sales scale of Blackwell, stating that the "Big Six Tech Giants" in the U.S. and major companies worldwide will continue to spend heavily on Blackwell to deploy or enhance AI training/cloud AI inference computing infrastructure on a large scale.

Wall Street has been closely monitoring the release of the latest product in the AI infrastructure field, Blackwell, which boasts the strongest speed and overall performance in the industry, along with significantly improved connectivity with other semiconductors. However, challenges in manufacturing capacity have led to a slower rollout than initially expected, and NVIDIA warned again during the earnings call that while supply has improved, there are still limitations that prevent them from fulfilling all received orders. Jensen Huang expects that demand for Blackwell products will far exceed supply in the coming quarters.

“The key issues surrounding Blackwell's production growth and customer concentration remain major concerns,” said Jacob Bourne, an analyst at Emarketer, in a report. “There is almost no room for execution errors by 2025.”

However, the shift towards Blackwell has impacted the chip giant's profitability, with NVIDIA expecting the company's gross margin for this quarter to drop from 75% in the previous quarter to 73%. NVIDIA anticipates that this figure will rebound when new products achieve larger-scale production and economic benefits become more favorable.

After NVIDIA's explosive growth performance announcement, Wall Street investment firms have generally raised their target stock prices for NVIDIA over the next 12 months, emphasizing that demand for Blackwell will continue to exceed supply, and investors “should not pay attention to market noise.” Analyst Stacy Rasgon from Bernstein raised NVIDIA's target price from $155 to $175 after the earnings announcement. “Demand for Blackwell products is very high, and this demand may exceed supply for some time in the future. With strong growth in the data center business, the outlook for the data center market over the next year is very optimistic, which is a significant positive factor for NVIDIA.” Rasgon stated that his rating for NVIDIA is 'outperform'