Let’s Talk Nvidia And The Blackwell AI chip

Nvidia Corporation, a semiconductor industry giant, is entering a crucial period in its history. Just before its annual GTC conference, which begins on March 18, 2025, the company faces a series of challenges, but also enormous opportunities. Investors and analysts are eagerly awaiting information that will dispel doubts about the new Blackwell AI chip and confirm that Nvidia will maintain its dominant market position.

Financial Results: Strong Performance Amid Market Turbulence

Nvidia’s financial results for the fourth quarter of fiscal year 2025 (ended January 2025) were quite strong. Revenue reached a record $39.3 billion, up 78% year-over-year. The data center segment, crucial for Nvidia, generated $35.6 billion in revenue, up 93% year-over-year. Net profit for the entire fiscal year 2025 was $74.3 billion, and earnings per share reached $0.89, exceeding analysts’ expectations.

Despite these excellent results, Nvidia’s shares experienced a significant correction. The company’s shares are down over 20% from their historical peak, and just a few days ago, this drop was over 30%. To a large extent, the declines are driven by uncertainty about the future of the chip market, due to the development of AI models that require less computing power.

Blackwell and Generative Artificial Intelligence

The data center segment remains Nvidia’s main growth driver. It is here that the Blackwell chip, which is expected to hit the market in calendar year 2025, could bring a revolution. Demand for Nvidia’s GPUs is driven by the rapidly growing generative artificial intelligence (AI) market. According to Bloomberg Intelligence forecasts, this market has enormous growth potential, reaching a value of nearly half a trillion dollars by the end of the decade.

Source: Bloomberg Intelligence

Nvidia, as the GPU market leader, is well-positioned to seize this opportunity. The company forecasts revenue of $43 billion in the first quarter of 2026, which would be another record. However, it is clear that if market share is maintained, demand for Nvidia’s products should increase significantly in the next few years, based on BI’s forecasts regarding AI services.

Attractive Valuation Despite Short-Term Risks

Nvidia’s current share price ($119) puts the forward P/E ratio at approximately 27, which means the company no longer seems as extremely expensive as it did recently. Moreover, considering orders from the largest tech giants, the company has a guaranteed source of income for many years to come. Despite certain risks, such as margin declines or export restrictions, Nvidia’s long-term prospects remain very promising.

GTC 2025: What Will the Future Bring?

The GTC 2025 conference, and in particular the keynote speech by Nvidia’s CEO, Jensen Huang, will be a key event for investors. Analysts expect the company to provide details about the Blackwell chip and dispel concerns about the supply chain.

Despite the improvement in market sentiment, Nvidia stock is decreasing at the beginning of the week. Source: xStation5

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