Nvidia Stockholders Alert: One Essential Factor to Focus on in the Second Half
Nvidia's highly anticipated Blackwell Ultra launch went smoothly, marking a successful start to the product's commercialization. The first quarter of the new chip's life brought in an impressive $11 billion in revenue, maintaining Nvidia's gross margin within its forecast range.
The smooth launch is crucial for Nvidia to maintain its market leadership and customer momentum. As we enter the earnings season, the focus will be on sales figures and gross margin for the Blackwell Ultra. Any glitches or missed financial goals during the launch could indicate potential problems for future product launches.
However, if the Blackwell Ultra launch is successful, Nvidia's stock may continue to rise in the second half. The company's future prospects are bright, with soaring demand in the area of AI inference and international projects such as the building of AI infrastructure in Abu Dhabi.
Nvidia has transformed itself from a company primarily serving the video gaming market to one at the center of the AI industry. Today, Nvidia generates most of its revenue from AI customers, with data center revenue making up 88% of total revenue in the latest quarter.
The success of the Blackwell Ultra launch will be a key factor in determining Nvidia's future stock performance. Cloud player CoreWeave has already announced the availability of the Blackwell Ultra platform, and the company mentioned that it will be using the new platform.
The GB300 NVL72, a system based on the Blackwell Ultra platform, offers a fiftyfold jump in output for reasoning model inference compared to the Hopper architecture. This significant improvement underscores the potential of the Blackwell Ultra and its impact on the AI industry.
Despite a decline of approximately 30% from the start of the year to early April, Nvidia continued to launch its new Blackwell platform and reported double-digit quarterly revenue growth. The decline was due to a variety of concerns, including the future of AI spending and potential impact of President Trump's import tariffs.
However, the demand for Blackwell this winter, with it exceeding supply at certain moments, shows customers are eager for Nvidia's next innovation. If there are issues during the Blackwell Ultra launch, it will be important to examine whether they are a one-time problem or something that could persist.
In conclusion, the Blackwell Ultra launch may be an important indicator of Nvidia's ability to handle frequent chip releases and maintain strong growth and profitability. The company's transformation into an AI powerhouse, coupled with the success of the Blackwell Ultra launch, positions Nvidia well for continued growth in the second half of the year and beyond.
