Nvidia’s management team is gearing up to discuss the H200 architecture in the upcoming earnings call, signaling a shift towards the Blackwell territory by the end of the year. The new architecture is set to revolutionize training and inference for trillion+ parameter models. Nvidia’s AI data center story has been supported by CUDA, their moat in the industry, but the company’s rapid product roadmap acts as the first line of defense in case this moat is breached.
Despite recent explosive growth that saw Nvidia report a 265% increase in revenue in the last quarter, the company is likely to hit peak growth soon. Analysts are predicting a growth rate of around 242% in their current estimates. The quality of Nvidia’s growth, supported by margins and earnings expansion, is notably better than traditional tech growth models. Nvidia’s aggressive product roadmap, focusing on the upcoming Blackwell architecture, aims to maintain stable pricing power and solidify the company’s position in the market.
Nvidia’s data center segment is set to reach new heights with the introduction of the Blackwell architecture. Analyst estimates suggest that the data center revenue could range from $150 billion to $200 billion by 2027. Nvidia’s aggressive product roadmap, aligning with Big Tech’s increasing AI investments, positions the company for significant growth in the coming years. Supply chain data points also indicate a strong demand for Blackwell GPUs over Hopper GPUs.
The Blackwell architecture, priced starting at $30,000 to $40,000, will feature expensive memory components with HBM3e. The shift to a one-year release cycle for new GPUs places Nvidia in competition with itself, with the Blackwell architecture set to be a game-changer in the AI accelerator market. The upcoming B100 and B200 GPUs, slated for release in late 2024 and early 2025 respectively, promise significant performance improvements over their predecessors.
Nvidia’s upcoming fiscal Q1 report is highly anticipated, with revenue expected to reach $24.6 billion, marking a 242% growth rate. Investor focus will also be on margins, as software contributions are set to positively impact the company’s bottom line. Analysts will scrutinize Nvidia’s cost structure, particularly in relation to the increasing costs of memory components like HBM3e. The company’s emphasis on AI accelerators, coupled with strong support from Big Tech’s capex plans, positions Nvidia for continued growth in the AI hardware market.
In conclusion, Nvidia’s upcoming earnings report serves as a prelude to the groundbreaking advancements expected with the Blackwell architecture. Despite an anticipated slowdown in growth, Nvidia’s organic growth model, strong product roadmap, and potential upside in the data center segment suggest long-term growth prospects. Investors are advised to view any dips in Nvidia’s stock price as buying opportunities, with Blackwell’s launch expected to drive the company’s performance in the near future.
