4 Key Takeaways From Nvidia's Earnings Call

After Nvidia (NVDA) reported first-quarter results surpassing lofty expectations, CEO Jensen Huang and other executives joined the chipmaker's earnings call to talk about the Blackwell rollout, debunk concerns about an "air pocket" in demand, how sovereign artificial intelligence (AI) and multimodality are positive drivers for Nvidia, and what's next after Blackwell.

Blackwell Revenue To Be Realized 'This Year'

Nvidia reported that the Blackwell platform unveiled in March is in "full production" and on track to be delivered to partners this year.

Huang clarified that the new system is set for production shipments starting in the second quarter and will ramp in the third quarter. He indicated customers should have Blackwell stood up in their data centers in the final quarter of fiscal 2025.

When asked if investors should expect Blackwell to impact revenue, Huang said, "we will see a lot of Blackwell revenue this year."

Huang Dismisses 'Air Pocket' Worries, Citing Easy Transition, Ready Customers, and Strong Demand

With Blackwell in production, some investors have raised concerns that Nvidia could face an "air pocket" in sales as some customers wait for the newest tech, rather than buying Blackwell's predecessor, Hopper.

When asked about the deployment of the next-gen platform, Huang highlighted that Blackwell was designed to be "backwards compatible" with systems already using Hopper to make the transition simple for Nvidia's customers.

The CEO added that the chipmaker has been "priming the pump" in preparing its customer ecosystem for the new platform to get them ready for liquid cooling.

Nvidia Chief Financial Officer (CFO) Colette Kress noted that the company believes that "demand for H2000 and Blackwell is well ahead of supply" and it expects this to continue "well into next year."

Sovereign AI and Multimodality Are Positive Drivers

Nvida executives indicated that sovereign AI, which is a nation's capability to produce AI using its own infrastructure and data, as well as new multimodal capabilities are positive drivers for the chipmaker.

The company said sovereign AI, which could be particularly appealing as data privacy concerns come into focus, is contributing to the diversification of data center revenue and increasing demand for its products amid growing AI computing consumption.

Huang said that as generative AI (genAI) capabilities advance and become multimodal, the need for Nvidia's computing power will intensify. Microsoft-backed (MSFT) OpenAI and Alphabet's (GOOGL) Google recently unveiled AI tools with audio and vision capabilities.

New Chip Coming After Blackwell

When asked about Nvidia's long-term innovation plans, Huang said he "can announce that after Blackwell, there's another chip," saying the company is on a "one-year rhythm." He also noted that investors can "count on [Nvidia] having new networking technology on a very fast rhythm."

The CEO said that the chipmaker is "all in" on Ethernet and highlighted its "rich ecosystem of partners," calling out Dell Technologies (DELL), which recently announced an expansion to its AI factory with Nvidia. Huang underlined that the chipmaker's Spectrum-X Ethernet networking fabric would be used in Dell's AI factory.

Nvidia shares were up 5.8% at $1,004.65 in extended trading as of 7:30 p.m. ET Wednesday following the company's earnings call.