NVIDIA’s earnings came in November 20, 2024, the revenue for this quarter is 17% and up 94% from a year ago. AI is not the only factor driving NVIDIA’s stock price. Q3 gaming revenue was $3.3 billion, up 14% from the previous quarter and up 15% from a year ago. On Tuesday, NVIDIA’s stock went up 4.89% (Yahoo Finance) because analysts expected strong demand for NVIDIA’s AI and data center chips. This might be why the earnings were 5.96% higher as well as the EPS (Earnings Per Share) was 8.66% higher.
The Hopper and the Blackwell
Two chipsets worth highlighting are Hopper and Blackwell. According to NVIDIA, “The NVIDIA Hopper architecture advances Tensor Core technology with the Transformer Engine, designed to accelerate the training of AI models. Hopper Tensor Cores have the capability to apply mixed FP8 and FP16 precisions to dramatically accelerate AI calculations for transformers.” Hopper features a secure architecture that encrypts data as it is processed while maintaining 57.6 terabytes delivery per second (TB/s) of all-to-all bandwidth.
The Blackwell chip is designed to accelerate inference and training for large language models (LLMs) and Mixture-of-Experts (MoE) models. The NVIDIA GB200 NVL72 connects 36 GB200 Grace Blackwell Superchips with 36 Grace CPUs and 72 Blackwell GPUs in a rack. The GB200 NVL72 is a liquid-cooled solution delivering 30X faster real-time inference for trillion-parameter large language models.
On the upside, one of NVIDIA’s customers, Nebius Group, is using 35,000 NVIDIA AI and graphics processing computer chips which helps to generate demand. On the downside, Blackwell severs have been overheating due to NVIDIA chips. Nvidia responded, “the engineering iterations are normal and expected.” Jensen Huang, founder and CEO of NVIDIA, claims, “Demand for Hopper and anticipation for Blackwell — in full production — are incredible as foundation model makers scale pretraining, post-training and inference.”
Despite the issues with Blackwell, Dell Technologies bought the newest AI GB200 NVL72 hardware as reported by Yahoo Finance (above). These facts could be reasons NVIDIA’s Earnings went up. Around 90% of Wall Street analysts tracked by Bloomberg recommend buying NVIDIA.
KeyBanc
KeyBanc is a regional bank that specializes in banking, investing, insurance and Corporate and investment banking. They recently took a more pessimistic approach and predicted that NVIDIA’s earnings would go down. They think that Chinese companies are feeling increased pressure to switch to domestic AI solutions rather than rely on NVIDIA’s hardware. KeyBanc revised its sales and earnings projections for NVIDIA’s fiscal fourth quarter, lowering the sales estimate from $40 billion to $37.7 billion.
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