Nvidia Reaps Benefits from Bullish Note, Blackwell Demand
Nvidia's (NVDA) stock surged in late-morning trading on Tuesday, moving into positive territory for the year. This rise follows a positive assessment of chip demand by Blackwell, a leading provider of AI solutions, ahead of Nvidia's fiscal fourth-quarter earnings next month.
Despite underperforming the tech market recently, Nvidia's shares have benefited from optimism surrounding Blackwell's potential as a revenue driver. Hyperscalers like Microsoft, Meta, and Google are increasing data center spending and adopting AI-powered offerings, leading to increased Blackwell demand.
Despite concerns about export restrictions to China and delays in Blackwell orders, Nvidia anticipates Blackwell demand will exceed the estimated "several billion dollars" this quarter.
UBS analyst Timothy Arcuri predicts significant Blackwell sales improvement in the current quarter and beyond. He believes chip yields have improved, favoring a shift from Hopper to Blackwell in upcoming quarters.
Recent record earnings from Foxconn, Nvidia's key supplier, provide further support for the analyst's positive outlook. Arcuri now estimates $9 billion in Blackwell revenue for the January quarter, up from $5 billion earlier.
While Nvidia only provides revenue and profit forecasts for the current quarter, analysts project a January-ending revenue of $37.5 billion, with data center revenue reaching $113.36 billion by 2025. Blackwell processors alone are expected to generate billions in revenue in Nvidia's fourth quarter, totaling $62 billion in 2025 and $97 billion in 2026.
At midday, Nvidia shares traded 0.74% higher at $138.89.