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NVIDIA is a leader in accelerated computing, initially focusing on PC graphics and expanding into various fields such as scientific computing, AI, data science, autonomous vehicles, robotics, and 3D internet applications . The company operates through two main segments: "Compute & Networking" and "Graphics" . NVIDIA's platforms address four major markets: Data Center, Gaming, Professional Visualization, and Automotive, with significant growth driven by the adoption of generative AI and accelerated computing .
- Compute & Networking - Develops and provides data center platforms and AI software, focusing on accelerated computing and generative AI applications.
- Graphics - Produces GPUs for gaming and professional visualization, enhancing visual experiences and computational capabilities.
- Data Center - Offers solutions for data-intensive applications, supporting AI, data science, and scientific computing needs.
- Gaming - Designs and manufactures GPUs and related technologies to enhance gaming experiences.
- Professional Visualization - Provides advanced graphics solutions for professionals in fields such as design, animation, and simulation.
- Automotive - Develops automotive solutions, including technologies for autonomous vehicles and advanced driver-assistance systems.
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Given the 15% sequential decline in the networking business despite stating strong demand and multiple cloud design wins, can you unpack the underlying issues in the Networking segment, including any constraints or challenges with Spectrum-X's growth to multiple billions?
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With the debate around scaling large language models potentially stalling, how is NVIDIA assisting customers to overcome these scaling challenges, and is this situation driving even greater demand for Blackwell?
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Can you provide a detailed breakdown of the compute resources allocated to pretraining, reinforcement learning, and inference in AI workloads, and where do you see the most significant growth occurring among these segments?
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Historically, hardware deployment cycles have included periods of digestion; when do you anticipate this phase occurring for NVIDIA, and how many quarters of shipments are required to satisfy the initial demand for Blackwell, considering plans to grow into calendar '26?
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In light of reports about heating issues following the mass change earlier this year, can you address concerns regarding NVIDIA's ability to execute the roadmap as presented, including the upcoming releases of Ultra and the transition to Ruben in 2026?
Competitors mentioned in the company's latest 10K filing.
- Advanced Micro Devices, Inc. (AMD) - Competitor in hardware and software for discrete and integrated GPUs, custom chips, and other accelerated computing solutions, including AI solutions .
- Huawei Technologies Co. Ltd. (Huawei) - Competitor in hardware and software for discrete and integrated GPUs, custom chips, and other accelerated computing solutions, including AI solutions .
- Intel Corporation (Intel) - Competitor in hardware and software for discrete and integrated GPUs, custom chips, and other accelerated computing solutions, including AI solutions .
- Alibaba Group - Large cloud services company with internal teams designing hardware and software that incorporate accelerated or AI computing functionality .
- Alphabet Inc. - Large cloud services company with internal teams designing hardware and software that incorporate accelerated or AI computing functionality .
- Amazon, Inc. - Large cloud services company with internal teams designing hardware and software that incorporate accelerated or AI computing functionality .
- Baidu, Inc. - Large cloud services company with internal teams designing hardware and software that incorporate accelerated or AI computing functionality .
- Microsoft Corporation (Microsoft) - Large cloud services company with internal teams designing hardware and software that incorporate accelerated or AI computing functionality .
- Ambarella, Inc. - Supplier of hardware and software for SoC products used in servers or embedded into automobiles, autonomous machines, and gaming devices .
- Broadcom Inc. (Broadcom) - Supplier of hardware and software for SoC products used in servers or embedded into automobiles, autonomous machines, and gaming devices .
- Qualcomm Incorporated - Supplier of hardware and software for SoC products used in servers or embedded into automobiles, autonomous machines, and gaming devices .
- Renesas Electronics Corporation - Supplier of hardware and software for SoC products used in servers or embedded into automobiles, autonomous machines, and gaming devices .
- Samsung - Supplier of hardware and software for SoC products used in servers or embedded into automobiles, autonomous machines, and gaming devices .
- Tesla, Inc. - Company with internal teams designing SoC products for their own products and services .
- Arista Networks - Competitor in networking products consisting of switches, network adapters (including DPUs), and cable solutions .
- Cisco Systems, Inc. - Competitor in networking products consisting of switches, network adapters (including DPUs), and cable solutions .
- Hewlett Packard Enterprise Company - Competitor in networking products consisting of switches, network adapters (including DPUs), and cable solutions .
- Lumentum Holdings - Competitor in networking products consisting of switches, network adapters (including DPUs), and cable solutions .
- Marvell Technology Group - Competitor in networking products consisting of switches, network adapters (including DPUs), and cable solutions .
Recent developments and announcements about NVDA.
Financial Reporting
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Record Revenue: NVIDIA reported a record quarterly revenue of $35.1 billion, which is a 17% increase from the previous quarter and a 94% increase from the same period last year .
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Data Center Performance: The Data Center segment also achieved record revenue of $30.8 billion, marking a 17% increase from the previous quarter and a 112% increase year-over-year. This growth was driven by strong demand for NVIDIA's Hopper computing platform, which is used for training and inferencing large language models and other AI applications .
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Earnings Per Share: The GAAP earnings per diluted share were $0.78, up 16% from the previous quarter and 111% from the previous year. Non-GAAP earnings per diluted share were $0.81, reflecting a 19% increase from the previous quarter and a 103% increase year-over-year .
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Segment Revenue:
- Compute & Networking: Revenue was $31.0 billion, up 17% from the previous quarter and 112% year-over-year.
- Graphics: Revenue was $4.0 billion, up 13% from the previous quarter and 16% year-over-year.
- Gaming: Revenue was $3.3 billion, up 14% from the previous quarter and 15% year-over-year.
- Professional Visualization: Revenue was $486 million, up 7% from the previous quarter and 17% year-over-year.
- Automotive: Revenue was $449 million, up 30% from the previous quarter and 72% year-over-year .
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Outlook for Q4 FY2025: NVIDIA expects revenue for the fourth quarter of fiscal 2025 to be approximately $37.5 billion, with GAAP and non-GAAP gross margins expected to be around 73.0% and 73.5%, respectively .
Earnings Call
NVIDIA recently held its earnings call for the third quarter of fiscal 2025, where they reported a revenue of $35.1 billion, marking a 17% sequential increase and a 94% year-on-year growth, surpassing their outlook of $32.5 billion . The company's data center segment achieved record revenue of $30.8 billion, driven by exceptional demand for NVIDIA Hopper and the rapid ramp-up of NVIDIA H200 sales . NVIDIA's management provided forward guidance for the fourth quarter, expecting total revenue to be approximately $37.5 billion, plus or minus 2%, with GAAP and non-GAAP gross margins anticipated to be around 73% and 73.5%, respectively .
Key strategic initiatives include the ramp-up of Blackwell products, which are expected to exceed previous revenue estimates due to increased supply visibility . NVIDIA is focusing on AI infrastructure, with significant investments in data centers to support new product introductions . The company is also seeing strong demand for its AI platforms, with Blackwell systems being integrated into diverse data center configurations worldwide .
During the earnings call, analysts raised questions about the scaling of large language models and the demand for Blackwell, to which NVIDIA's CEO Jensen Huang responded by highlighting the continued scaling of foundation models and the introduction of new scaling methods like post-training and inference time scaling . The demand for NVIDIA's infrastructure remains high, driven by the growth of AI-native companies and enterprise adoption of AI technologies .
Analysts also inquired about NVIDIA's gross margin trajectory and the impact of Blackwell's ramp-up. Colette Kress, NVIDIA's CFO, indicated that gross margins could reach the mid-70s in the second half of the next year, depending on the product mix . The company is working to address supply constraints, particularly in the gaming segment, and expects to improve supply as they enter the new calendar year .
Overall, NVIDIA is experiencing robust growth across its market platforms, fueled by the adoption of accelerated computing and AI, and is well-positioned to capitalize on the ongoing AI revolution .
Earnings Report
NVIDIA's Third Quarter Fiscal 2025 Earnings Results
NVIDIA Corporation has announced its financial results for the third quarter of fiscal 2025, ending on October 27, 2024. Here are the key highlights from the earnings report:
These results highlight NVIDIA's strong performance across its various segments, driven by the increasing demand for AI and computing solutions. The company continues to see significant growth in its Data Center and Gaming segments, reflecting its strategic focus on AI and accelerated computing .