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    NVIDIA Corp (NVDA)

    Q1 2025 Summary

    Published Jan 10, 2025, 5:10 PM UTC
    Initial Price$61.23January 27, 2024
    Final Price$87.74April 27, 2024
    Price Change$26.51
    % Change+43.30%

    What went well

    • NVIDIA is experiencing unprecedented demand for its GPUs and AI infrastructure, with demand outstripping supply across multiple product generations, including Hopper, H200, and the upcoming Blackwell platform. , , ,
    • The company's rapid innovation and expansive product roadmap, including the imminent ramp of Blackwell, positions NVIDIA for continued revenue growth and leadership in AI computing, as customers eagerly adopt new platforms to enhance performance and reduce total cost of ownership (TCO). , , ,
    • NVIDIA's versatile, end-to-end accelerated computing platform, widely adopted across clouds, provides a competitive advantage by delivering high performance and lowest TCO, limiting risks from competition and supporting a strong market position. ,

    What went wrong

    • Reduced Revenue in China Due to Export Restrictions: NVIDIA's Data Center revenue in China has decreased significantly as a result of new export control restrictions, and the market in China has become more competitive. This could impact NVIDIA's growth prospects in a significant market. ,
    • Potential Competition from Custom Solutions: Some of NVIDIA's customers, including major cloud service providers, are developing their own internal solutions and custom ASICs for neural network training and inference, which could pose a competitive threat to NVIDIA's versatile accelerated computing approach in the medium to long term. ,
    • Rapid Product Cycles May Lead to Customer Hesitation: The fast pace of NVIDIA's product innovation might cause customers to delay or pause purchases of current-generation products like Hopper and H100 in anticipation of upcoming products like Blackwell, potentially impacting current sales. ,

    Q&A Summary

    1. Blackwell Revenue Expectations
      Q: Will Blackwell contribute significant revenue this year?
      A: Yes, we expect to see a lot of Blackwell revenue this year, with production shipments starting in Q2, ramping up in Q3, and customers having data centers operational in Q4.

    2. High GPU Demand and Supply Constraints
      Q: How are you managing high GPU demand and supply constraints?
      A: Demand for our GPUs is incredible, outstripping supply as applications like ChatGPT, GPT-4O, and numerous AI startups consume every GPU available. We're racing to deliver systems quickly to meet this overwhelming demand.

    3. Advancing Technology vs. Customer Investments
      Q: Are customers worried new products will outpace their current investments?
      A: Customers are early in their build-outs and need to make money today. They're continuing to build with Hopper systems because time to train is critical, and staying ahead is more valuable than waiting for the next generation.

    4. Competition from Cloud Providers
      Q: Do cloud customers' internal AI programs pose a competitive threat?
      A: We differentiate ourselves with a versatile accelerated computing architecture that handles every aspect of the AI pipeline. Being in every cloud, building AI factories, and offering the lowest total cost of ownership strengthen our competitive edge.

    5. Transitioning to Blackwell with Liquid Cooling
      Q: Will liquid cooling complexities delay Blackwell deployment?
      A: No, Blackwell offers many configurations, including air-cooled and liquid-cooled options. We've prepared the ecosystem for this transition, and systems are designed to be backwards compatible, easing the shift from H100 to H200 to B100.

    6. Demand for Complete Systems
      Q: Why is there strong demand for systems now versus components?
      A: Our Blackwell platform has expanded offerings significantly, with 100 different system configurations. By providing more components of the data center, we're delivering higher performance and energy efficiency, benefiting all involved.

    7. China Sales and H20 Allocation
      Q: How are you allocating supply between Hopper products for China?
      A: We honor all our customers, but business in China is substantially lower than in the past due to limitations on our technology. Demand exceeding supply applies to the entire market, especially for H200 and Blackwell towards year-end.

    8. Grace CPU and Potential in PCs
      Q: Could NVIDIA's CPU advantages extend to client PCs?
      A: Yes, there are architectural and system reasons to explore opportunities. Grace CPU's integration offers benefits not possible with current configurations, and we see potential for system innovation even in PCs.

    9. Versatility Over Custom Solutions
      Q: Why favor a versatile platform over custom solutions?
      A: Our accelerated computing is versatile, handling a wide range of AI advancements. We're not building a widget for one model but a platform suited for the entire domain, providing the lowest total cost of ownership.

    10. Future Innovation Roadmap
      Q: What's NVIDIA's plan for innovation in the coming decade?
      A: We're on a one-year rhythm, introducing new chips and networking technologies rapidly. All advancements run CUDA, so customers benefit from continuous performance improvements without changing their software stack.

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