Nvidia (NASDAQ: NVDA) recently reported another blowout quarter. After telling investors to expect revenue to be around $32.5 billion in the third quarter of fiscal 2025, the leading artificial intelligence (AI) company reported record quarterly revenue of $35.1 billion for the period ending October 27.
However, exceeding expectations has become the norm as capital expenditures for AI continue to grow. Analysts were already expecting another big quarter, and Nvidia stock reflects plenty of future success. Nvidia shares are down about 7% since its fiscal third-quarter report, even after some very optimistic comments from Nvidia CEO Jensen Huang during the earnings conference call.
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But it was the comments he made the week before Nvidia’s earnings report that should get investors most excited about owning the stock. Huang was in Japan on Nov. 12 for an AI summit, and he presented a vision of the future that gives investors a clear picture of why it’s not too late to buy Nvidia stock.
While answering questions during the Nov. 20 earnings call, Huang addressed reports on production and quality-related issues for the latest Blackwell AI architecture. Blackwell’s success is critical for Nvidia heading into next year. Huang delivered great news on that front:
Blackwell’s production is running at full speed. In fact… we will deliver more Blackwells this quarter than we previously estimated. It is true that demand is greater than our supply.
When Huang was at an AI summit in Japan with Soft Sofa However, CEO Masayoshi Son explained the week before how ubiquitous he expects Blackwell and Nvidia’s other AI-related platforms to be.
Huang and Son have a history together. Huang even joked during the fireside chat that Son “wanted to lend me money to buy Nvidia — everything.” “Now I regret not recording you,” he told Son, adding, “That was a great idea.” Son said the offer was made in 2016, shortly after SoftBank acquired the semiconductor chip designer Arm positions for $32 billion. SoftBank still owns 90% of Arm after it went public again in 2023.
Nvidia’s CEO made an even more important revelation during the summit. He stated: “Today we are announcing that we are partnering with SoftBank to bring and build an AI infrastructure for Japan. Together we will build Japan’s largest AI factory… from Nvidia DGX.”
Nvidia DGX is the company’s AI enterprise platform. The company describes it as its “software, infrastructure and expertise in a modern, unified AI development solution.” It is essentially the business platform where the AI rubber meets the road.
SoftBank will integrate Nvidia technology to add intelligence to its telecommunications network beyond voice, data and video. It will be distributed across SoftBank’s 200,000 sites in Japan.
It plans to add an “AI store” to make AI available to 55 million SoftBank customers. All built on top of Nvidia’s AI business. The result will be an ‘AI grid’ that will run across Japan. Huang called it “completely revolutionary.” “This is the first of its kind to transform the telecommunications network, the communications network, into an AI network,” he said.
This is an example of how Nvidia’s business can maintain its growth momentum. The applications are endless. From customer service to helping manage and operate a network of self-driving cars.
Huang presented an example where entire factories could become an AI system using cameras and large language models. Managers can ‘talk’ to the factory about what is happening, whether there is anything abnormal at the site, whether any accidents have occurred, or simply to receive daily reports. The concept could also be extended to other physical objects, such as a road, a stadium, an office or a building.
Investors wondering whether Nvidia stock has already risen too high should consider the potential profits that could come from business AI. This next phase is already underway. Nvidia CFO Colette Kress told investors on the quarterly call that the company has shipped its first Blackwell DGX engineering samples to OpenAI, an artificial intelligence development company.
Huang’s optimism about the future of his company is understandable. These AI collaboration projects will only grow. Any investor with a portfolio that includes a growth segment would want Nvidia in it.
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Howard Smith has positions at Nvidia. The Motley Fool holds positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
CEO Jensen Huang just delivered some fantastic news for Nvidia investors, originally published by The Motley Fool
