Nvidia's Blackwell Surge: $11 Billion Revenue Milestone and Ambitious Expansion Plans Propel AI Giant Forward

In a recent earnings call, Nvidia Corporation (NASDAQ: NVDA) announced steady progress in the promotion of its GB200 system, despite facing complex challenges. The company has successfully ramped up the production of its Grace Blackwell system, achieving approximately $11 billion in revenue last quarter. As demand for the Blackwell systems remains robust, Nvidia plans further scale-up efforts to meet customer needs.

During the call, Nvidia's Executive Vice President and CFO, Colette Kress, noted that during the ramp-up phase of Blackwell's capacity, the company's gross margin would slightly exceed 70%. Nvidia is currently focused on accelerating manufacturing to ensure quick delivery to its clients. Once full capacity is achieved, the company anticipates reducing costs and improving margins, possibly reaching a gross margin of around 75% later this year.

CEO Jensen Huang highlighted that issues encountered in the first-generation Blackwell had been fully resolved. He emphasized that the next iteration, Blackwell Ultra, is set to launch on an annual rhythm, featuring updated networks, new memory, and enhanced processors. These advancements will be showcased during Nvidia's GTC event in March, alongside other exciting new products.

As for future market demand, Huang underscored confidence supported by both short-term signals, such as orders, and medium-term indicators, like heightened infrastructure and capital expenditures compared to previous years. In the longer term, he pointed to the shift from CPU-based manual coding to machine learning and AI-based software running on GPUs and accelerated computing systems.

The executive team addressed challenges related to the complexity of rack-level systems during the earnings call. Despite these difficulties, Nvidia has managed to significantly increase Blackwell's output, reporting around $11 billion in revenue from last quarter. The company remains committed to scaling up production as customer enthusiasm and demand for the Blackwell system continue to surge. Public celebrations of successful startups utilizing the Grace Blackwell system by partners such as CoreWeave, Microsoft, and OpenAI further underscore its widespread adoption.

Nvidia's financial outlook reflects these positive developments. The company forecasts its revenue for the first quarter to reach $43 billion, exceeding average analyst estimates. Additionally, Nvidia anticipates that Blackwell's production could lead to a continued improvement in gross margins later this year. As Nvidia continues to innovate and meet the booming demand for AI systems, it is well-positioned for sustained growth in the coming quarters.