This comes at a key time for the tech company. Nvidia has built an AI empire in recent years, seeing triple-digit revenue growth quarter after quarter. But with the company’s revenue levels reaching extreme highs, triple-digit profits may not be sustainable. And rivals have also produced chips that they hope will help them gain market share. So it’s natural to ask this question: where will Nvidia be six months after Blackwell’s launch? Let’s look at what history has to say – and a few other clues – and find out.
First, a quick recap of Nvidia’s path so far and what to expect from the Blackwell launch. Nvidia has built a dominant position in the AI market by designing the most powerful chips and an entire platform of products and services that go with them. So customers can simply go to Nvidia for the chips, known as graphics processing units (GPUs), or they can use the entire Nvidia stack to run their data centers.
This has helped the company grow quarterly revenue to a record $30 billion and gross margin to levels above 70%. Nvidia has also seen its net profit rise by triple digits, with profits of more than $16 billion last quarter.
Investors are now looking forward to Blackwell’s launch with high anticipation thanks to the architecture’s six breakthrough innovations – from Nvidia’s best chip yet to a powerful preventative maintenance system to ensure system uptime and a fifth-generation NVLink to ensure high speeds to deliver communication between up to 576 GPUs.
As mentioned, Nvidia plans to ramp up production of Blackwell in the coming weeks, and in Nvidia’s most recent earnings report, CEO Jensen Huang gave us clues about customer interest in this new product. Huang said demand has exceeded supply and he expects that to continue next year. More recently, Huang confirmed this in an interview with CNBC, calling the question about Blackwell “insane.”
All of this prompted Nvidia to forecast billions of dollars in Blackwell revenue in the fourth quarter. So it won’t be long before Blackwell will contribute significantly to Nvidia’s revenue. Furthermore, Nvidia forecasts a gross margin in the mid-70s for the full year, showing us that the company is able to launch this important product while maintaining an extremely high level of profitability.
Now let’s talk about where Nvidia could be six months after launch. History offers us the first clue, showing us that in the six months after Nvidia’s last release of a new architecture – Hopper, in 2022 – its shares rose almost 100%.
A look at Nvidia’s earnings report for the period ending April 30, 2023, about six months after Hopper’s launch, shows us that demand for the platform and related products soared. And Nvidia reported record data center revenue this quarter. So history gives us reason to be confident in Nvidia’s position six months after the upcoming Blackwell launch.
And a number of other elements make me optimistic about the coming period. Nvidia, as it streamlines the Blackwell manufacturing process and gets past the initial launch costs, can potentially increase margins. This may not be as early as six months after launch, but that’s okay. Because the gross margin is already extremely high at more than 70%, any improvement further down the road is the icing on the cake.
Nvidia doesn’t disclose the percentage of revenue it generates from specific customers, but analysts and news reports suggest the company’s largest customers are. Microsoft, Metaplatforms, AmazonAnd Alphabet. This is positive because these players all have the resources to continue to boost their investments as the AI boom progresses.
Moreover, recent anecdotes show how eager market giants are to buy into Nvidia products. Oracle co-founder Larry Ellison recently said that he and Tesla chief Elon Musk “begged” Nvidia for more chips. This suggests that even as competitors release new chips, the industry powerhouses are still flocking to Nvidia first.
As mentioned above, Nvidia obviously doesn’t report triple-digit growth every quarter, as it has done recently. So six months after Blackwell’s launch, we could be looking at a slower growth rate than Nvidia has achieved in the past. But this is because Nvidia has already increased its revenues to staggering levels, making it difficult to continue winning at such a pace. A delay should therefore not be seen as negative.
All of this means that, six months after Blackwell’s launch, Nvidia may still be catching up on massive demand, but the company can also report billions of dollars in revenue from the platform and solid earnings growth. This could also translate into fantastic stock performance. But even if shares don’t rise like they did after Hopper’s launch, Nvidia is well positioned to deliver long-term gains for investors.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, a director at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, former director of market development and spokeswoman for Facebook and sister of Mark Zuckerberg, CEO of Meta Platforms, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon, Oracle and Tesla. The Motley Fool holds positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, Oracle and Tesla. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
Where will Nvidia be six months after Blackwell’s launch? This is what history says. was originally published by The Motley Fool
