Investopedia / Julie Bang
After Nvidia (NVDA) posted better-than-expected quarterly results, CEO Jensen Huang and CFO Colette Kress gave investors an update on the strength of demand for the company’s artificial intelligence (AI) chips, plans for its Blackwell shipments, and more in the company’s earnings call.
Cloud Providers Help Drive Data Center Sales to Record High
Sales from Nvidia’s data center business more than doubled in the second quarter from a year earlier, hitting a record high.
CFO Colette Kress said roughly 45% of the data center sales were from cloud service providers, while consumer, internet, and enterprise company customers accounted for half the data center revenue.
The surge in data center sales comes as many tech giants raise spending on AI, with the breakdown offering some insights into the state of AI demand. Major cloud providers Microsoft (MSFT), Google parent Alphabet (GOOGL), and Amazon (AMZN) have all said they expect to raise spending on AI infrastructure, particularly data centers, and they’re all Nvidia customers.
Nvidia Says Blackwell Will Be a ‘Game Changer’
CEO Jensen Huang also said Nvidia expects the data center business could grow “quite significantly next year,” adding that “Blackwell is going to be going to be a complete game changer for the industry.”
Huang has previously said he expects Nvidia’s Blackwell platform could be the “most successful product” in the company’s history, with analysts calling it the “most ambitious project in Silicon Valley” after it was unveiled in March.
Blackwell Plans Still on Track, With Demand Outpacing Supply
Amid concerns shipments of Nvidia’s Blackwell could be delayed, Kress said Nvidia expects “several billion dollars” from Blackwell sales as production ramps up in the fourth quarter.
Demand for Blackwell also remains “well above supply,” Kress said, adding that Nvidia expects this to continue into next year.
Strong Demand for Hopper Ahead of Blackwell Shipments
When asked about the demand for Hopper, Blackwell’s predecessor, Huang said demand remains strong as many of Nvidia’s customers “simply can’t afford” to wait on the new AI chips.
Huang said that due to the dynamic nature of the generative AI market, and the potential consequences of waiting, that when companies have the opportunity to build advancing computing infrastructure sooner with Hopper, “that decision is relatively clear.”
Nvidia shares were down nearly 7% in extended trading Wednesday following the company’s earnings call, as its results may not have been enough to satisfy investors’ lofty expectations.
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