Nvidia News

[Adam Kay]

From the Q& A session:

China Market (Vivek Arya’s Question) NVIDIA anticipates $2 billion to $5 billion in H20 chip shipments to China in Q3, pending geopolitical resolutions and additional licences. Supply is ready, with potential to scale if demand and approvals increase.
Long-term, China represents a $50 billion opportunity in 2025, with a projected 50% CAGR, driven by its status as the second-largest computing market and home to 50% of global AI researchers. Licensing Blackwell for China is seen as critical for U.S. tech competitiveness (Huang).

Competitive Landscape and ASICs (Vivek Arya’s Question) Huang addressed the rise of ASICs, noting their complexity and high failure rate in production. NVIDIA’s strength lies in its full-stack AI infrastructure (been saying this for years), available across clouds, on-premises, and edge devices, supporting diverse AI models and frameworks.
Unlike ASICs, NVIDIA’s platform (including GPUs, CPUs, NVLink, and networking) offers unmatched performance per watt and dollar, driving revenue and margins for customers. This holistic approach positions NVIDIA as the preferred choice for AI factories. NB: Broadcom is a fantastic business and a great companion to the GPU King

Data Centre Infrastructure Spend (Ben Reitzes’ Question) Huang projects $3 trillion to $4 trillion in global data centre infrastructure investment by decade’s end, driven by hyperscalers’ $600 billion annual CapEx (doubled in two years) and growing enterprise and cloud provider demand.
NVIDIA expects to capture ~$35 billion per gigawatt data centre (out of $50 billion–$60 billion total). Power limitations are a key bottleneck, making NVIDIA’s high performance per watt critical for maximising revenue. Only yesterday I discussed this with one of you! Power bottlenecks

China Long-Term Prospects (Joe Moore’s Question) China’s AI market is vital due to its scale and research output (e.g., DeepSeek etc). Open-source models from China fuel global enterprise and robotics adoption.
Huang advocates for U.S. companies to address this market to maintain leadership in the AI race, with hopes of licensing Blackwell for China.

Spectrum-XGS and Networking (Aaron Rakers’ Question) NVIDIA’s networking portfolio (NVLink, InfiniBand, Spectrum-X Ethernet) is a growing $10 billion+ annualised business. Spectrum-XGS targets interconnecting multiple AI factories, enhancing efficiency.
Networking choices can yield significant returns (e.g., 10–20% efficiency gains equate to $10 billion–$20 billion in benefits for a $50 billion data centre). InfiniBand leads in performance, while Spectrum-X Ethernet caters to Ethernet-based data centres.

Revenue Guidance Breakdown (Stacy Rasgon’s Question) Colette Kress confirmed Q3 revenue growth of over $7 billion, primarily driven by Blackwell in data centres, encompassing both compute and networking (NVLink-integrated systems). Hopper (H100, H200) remains strong but secondary to Blackwell’s dominance.

Rubin Transition (Jim Schneider’s Question) Rubin, NVIDIA’s next platform, is on an annual release cycle to boost performance per watt and dollar, enhancing customer revenues and margins. It represents a significant leap, similar to Blackwell’s over Hopper, with specifics to be revealed at GTC.
Rubin includes six new chips, already in fabrication at TSMC, and will power third-generation NVLink rack-scale AI supercomputers.

AI Market Growth (Timothy Arcuri’s Question) Huang projects a 50% CAGR (right there expected go fwd growth rate-if multiples dont compress this is what the company should grow at on avg!) for the AI market, with NVIDIA’s data centre revenue expected to grow in line or better, driven by hyperscaler CapEx, AI-native startups ($180 billion funded in 2025), and enterprise adoption via open-source models.
Demand for H100, H200, and Blackwell is exceptionally high, with supply constraints noted across the industry.

Closing Remarks (Huang) Blackwell delivers a generational leap, with NVLink 72 enabling massive scale for reasoning AI. Rubin is in production, targeting multi-gigawatt AI super factories.
The AI market is expanding rapidly, driven by agentic AI, enterprise adoption, and physical AI in robotics. NVIDIA sees a robust outlook through the decade, contributing significantly to the $3 trillion–$4 trillion AI infrastructure buildout.

[Adam Kay]

Next quarter net income will be > $33B and accelerating away. A 50% growth rate will flywheel earnings into the next decade.

[Adam Kay]

Also during the call-remember the H20 15% cut to the US Govt (USG)

Nvidia has indicated that it may be able to proceed with H20 chip sales to China without handing over the 15 % revenue cut recently proposed by the U.S. government. CFO Colette Kress emphasised that, while the company holds approved export licences, “I don’t have to do this 15 % until I see something that is a true regulatory document.” To date, there is no formal law or regulation codifying the requirement, leaving Nvidia under no legal obligation to comply.

The expectation could well be a roll-back back or modified approach (DT has form here), given its shaky legal footing and widespread criticism, particularly as China has raised security concerns and paused adoption of the H20. The situation remains fluid but by no means locked-in.

My thoughts are, given they are raising this in an overt manner-no they won't end up paying. I also think once Rubin is out, Nvidia will get approval to sell Blackwell into China.

[exIM]

Thanks for the updates Adam, glad to see the numbers are strong, apart from the size of these numbers involved, I was particularly impressed at the profit margins !

[2BToo]

Seconded.

(Although I'll admit that the prospect of selling decent AI chips to China makes me a bit nervous.)

[Adam Kay]

Selling the less efficient, less powerful versions. China won't be stopped just slowed down so the US may as well profit from it. Profit = more money for innovation and taxes too

On the numbers, it looks, broadly speaking like we are now on a 60/70/80/90/100 rhythm . The margins are exceptional and in the future, software will continue to play a big part so I don't see margins falling any time soon. Not in a meaningful way.

AMDs PE is 35% higher than Nvidia on a Fwd basis and 100% higher on a trailing basis. AMD margins are 32% lower. AMDs problem is no Cuda and inability to scale out inside a data centre nor can they scale across data centres. Even based on what analysts think Nvidia EPS(earnings) growth over the next several years is 50% MORE than AMD. So whilst you could make a case for AMD as an investment with a PEG of approx 1.4 which is not expensive but at the same time not attractive, Nvidia has a PEG of about 0.7.

[Adam Kay]

This is in regards to Blackwell chips