Jensen Huang is extremely bullish on Nvidia’s new Blackwell artificial intelligence chips.
With a market capitalization of $3.6 trillion, Nvidia (NVDA 0.34%) is currently the world’s largest company. It created $3.2 trillion of that value over the last two years alone thanks to surging demand for its data center graphics processing units (GPUs), which are the most popular in the world for developing artificial intelligence (AI) models.
Nvidia will report its latest financial results for its fiscal 2025 third quarter (which ended on Oct. 31) on Nov. 20, and the company is forecast to deliver record revenue led by its data center segment.
In an interview with CNBC last month, Nvidia CEO Jensen Huang made a series of very positive comments about the company’s new Blackwell GPU architecture. He said five words, in particular, that should have every Nvidia stock investor excited ahead of Nov. 20.
Blackwell chips will be a game changer
A substantial amount of computing power is required to develop AI models, and most businesses can’t afford to build the necessary data centers because chips are so expensive. Nvidia’s H100 was the go-to data center GPU for AI development for most of last year, and a single unit would cost up to $40,000. Some AI applications required tens of thousands of them.
That’s why well-resourced tech giants like Microsoft and Amazon are building centralized data centers and renting the computing capacity to enterprises. It’s a profitable venture for them at scale, and it makes AI financially accessible to businesses that can’t build their own infrastructure.
Nvidia’s new Blackwell architecture delivers an enormous leap in performance. The Blackwell-based GB200 NVL72 GPU system can perform AI inference at 30 times the speed of the equivalent H100 system. Each individual GB200 GPU sells for between $30,000 and $40,000, which is around the same price as the H100 when it first came out.
That translates to an incredible increase in cost efficiency, meaning some of the most advanced AI models will be financially accessible to a wider range of businesses and developers.
Tech giants are ramping up their AI spending
Microsoft is rumored to be the biggest buyer of Blackwell GPUs so far. It told investors it allocated $20 billion to capital expenditures (capex) during its fiscal 2025 first quarter (ended Sept. 30) alone, most of which went toward AI data centers and chips. That followed $55.7 billion in capex spending in fiscal 2024.
Similarly, Amazon spent $30.5 billion on AI infrastructure in the first half of 2024, and it’s on track to spend almost $45 billion in the second half, which will take its total investment to $75 billion for the year.
Meta Platforms — which builds AI data centers for its own use — will invest up to $40 billion on infrastructure this year, and it plans to spend even more in 2025. Microsoft, Amazon, and Meta are just a few of Nvidia’s top customers.
Image source: Nvidia.
Nvidia could deliver record revenue in Q3
Nvidia generated $30 billion in total revenue during its fiscal 2025 second quarter (ended July 28), which was a 122% increase from the year-ago period. That included $26.3 billion in data center revenue, which was up 154%.
Nvidia’s guidance points to $32.5 billion in total revenue in Q3, but Wall Street’s consensus estimate (according to Yahoo) is currently at $32.9 billion. That means the company’s own forecast might be too conservative.
Considering Nvidia routinely blows Wall Street‘s numbers out of the water, I would expect total revenue to come in north of $32.9 billion when the company reports on Nov. 20. If that happens, Blackwell might have made a significant contribution.
Five magic words from Jensen Huang
Huang appeared on CNBC on Oct. 10, and he made several positive comments about Blackwell. But these five words should make every investor excited: “Demand for Blackwell is insane.”
He also told CNBC the new chips are in full production as planned, and he explained that every tech customer wants to be first, and they all want to have the most.
Blackwell shipments to customers are already ramping up. An estimate by Morgan Stanley suggests Nvidia will sell up to 300,000 GB200 GPUs in the calendar fourth quarter of 2024, and since that includes October, the company could report billions of dollars in Blackwell revenue in its upcoming report on Nov. 20.
Morgan Stanley also said shipments could ramp up to a whopping 800,000 units in the first three months of 2025. In other words, sales are likely to grow exceptionally fast.
Therefore, investors who already own Nvidia stock might want to hold on through Nov. 20 (and beyond). I actually predict Nvidia stock will be the best performer among all of its trillion-dollar peers next year, so investors who don’t own it might want to consider taking a position.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.