Nvidia’s robust first-quarter growth forecast, released on Wednesday, underscored the continued surge in demand for its artificial intelligence (AI) chips, with the company reporting “amazing” orders for its new Blackwell semiconductors. The optimistic outlook helped ease concerns about a potential slowdown in spending on its hardware, which had emerged last month.
The company’s shares initially rose in extended trading before dipping slightly in volatile after-hours activity, following a 3.7% gain during regular trading. Nvidia has been a standout performer in the AI-driven stock rally, with its shares surging more than 400% over the past two years.
CEO Jensen Huang struck an upbeat tone, stating, “AI is advancing at light speed,” and highlighting that “demand for Blackwell is amazing.” His comments are likely to reassure investors in AI-related stocks, which have faced recent volatility.
Huang also noted the successful ramp-up of Blackwell AI supercomputers, which have already generated billions of dollars in sales in their first quarter. Nvidia is transitioning from selling individual chips to offering full AI computing systems, integrating graphics chips, processors, and networking equipment under its new Blackwell architecture.
However, the Blackwell rollout has been both complex and costly, impacting the company’s margins. Nvidia forecast a first-quarter gross margin of 71%, slightly below Wall Street’s expectation of 72.2%. CFO Colette Kress assured investors on a conference call that margins would rebound to the mid-70% range later in the fiscal year as Blackwell production scales up and costs decrease.
A recent brokerage report added to these concerns, suggesting that Microsoft had scrapped leases for significant U.S. data center capacity, potentially indicating an oversupply in the market.
On a positive note for Nvidia, CFO Kress revealed that the Stargate data center project, announced last month by U.S. President Donald Trump, will utilize Nvidia’s Spectrum X ethernet for networking. These ethernet products are part of the company’s data center segment, further solidifying Nvidia’s role in the expanding AI infrastructure landscape.
As Nvidia navigates its product transition and scales up Blackwell production, the company remains a key player in the AI revolution, with its latest results reinforcing confidence in its growth trajectory.
Source: China Daily
