High expectations for Nvidia's next-generation GPU 'Blackwell' are rising, with the market watching ahead of the third-quarter earnings report.

November 20, 2024
The upcoming third-quarter performance report announcement by Nvidia is drawing market attention. The focus is particularly on the demand for the next-generation GPU "Blackwell" and its potential impact on earnings. Wall Street highlights the possibility of Blackwell's early shipments further boosting performance, as sales increase from GPU sales of H100 and H200 continue.
It is expected that the revenue will reach approximately $33 billion, an 83% increase year-on-year. Analysts express a bullish view on Nvidia's dominant presence in the AI field, despite anticipating supply constraints and increasing demand for next-generation chips.

Nvidia's next-generation GPU 'Blackwell' promises innovation in the AI field, but also faces the challenge of supply constraints. CFRA Research's Angelo Zino points out the possibility that Blackwell's supply may not keep up with demand throughout 2025.
Especially with the rapid expansion of hyperscale data center demand, it is predicted that this situation will lead to supply shortages. Nvidia anticipates the full-scale production of its products in early 2025, but the order status prior to that is expected to have a significant impact on future revenue.
While supply shortages may be seen as a short-term risk, they could also become an opportunity to enhance market competitiveness in the medium to long term. As a strategic investment to maintain its dominant position in the AI field, Nvidia needs to rapidly expand Blackwell's supply chain and focus on meeting customer needs in the data center market through manufacturing process optimization and partnership expansion.

Nvidia's current revenue is supported by the H100 and H200 GPUs, which play a central role in the company's AI field. These GPUs are in high demand from cloud providers and enterprises, supporting high-performance computing and the proliferation of AI. On the other hand, the next-generation GPU 'Blackwell' is expected to complement these existing products while providing higher performance.
According to Goldman Sachs analysis, in the third quarter, the continuous sales of existing GPUs will form the basis for revenue growth, with the potential for early shipments of Blackwell to contribute additionally. However, Blackwell is still in the experimental shipping stage at this point, and it is expected that the H100/H200 will continue to play a central role in terms of revenue. Thus, accurately distinguishing the roles of existing and new products to maximize synergies will be the key to maintaining Nvidia's competitive advantage.
Nvidia's growth strategy riding the wave of the expanding AI market.

Dan Ives of Wedbush predicts that Nvidia's performance will significantly grow in the coming years, exceeding $1 trillion, driven by the flow of AI-related investments. AI technology is advancing in a wide range of fields such as cloud, manufacturing, healthcare, finance, etc., pushing up the company's GPU demand. Especially in the training of AI models, Nvidia's products have virtually become the standard, with further revenue expansion expected based on this position.
As a unique perspective, Nvidia needs to focus not only on being just a hardware provider but also on software development and building an AI ecosystem. Expanding the ecosystem through proprietary technologies like CUDA is crucial in differentiating from competitors. Through such strategies, the company will further strengthen its leadership in the AI field.

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