All Aboard The AI Train: NVIDIA CEO States “The Age of Generative AI Is In Full Steam” in Record Q3 Report
The third quarter was another record quarter for NVIDIA (NVDA), with revenue of $35.1Bn, up 17% sequentially and 94% year-over-year (y/y). All market platforms posted strong sequential and y/y growth, driven by the adoption of NVIDIA’s accelerated computing and AI.
In the data center segment, revenue reached a record $30.8Bn, up 17% sequentially and 112% y/y. Cloud service providers were approximately half of data center sales, with revenue increasing more than 2x y/y as they deployed NVIDIA H200 infrastructure and high-speed networking. NVIDIA’s inference platform also saw significant growth, with rapid advancements in software algorithms boosting inference throughput by 5x in one year.
For Q4, NVIDIA expects total revenue of $37.5 billion, plus or minus 2%, driven by continued demand for Hopper architectures and the initial ramp of Blackwell. GAAP and non-GAAP gross margins are expected to be 73% and 73.5%, respectively, plus or minus 50 basis points. As Blackwell ramps, gross margins are expected to moderate to the low 70s when fully ramped, with Blackwell margins in the mid-70s.
After a successful mass ramp, the Blackwell AI infrastructure is now in full production, with 13,000 GPU samples shipped to customers in Q3, including the first Blackwell DGX engineering samples. Blackwell is a full-stack, full-infrastructure AI data center system with customizable configurations to address a diverse and growing market. Demand for Blackwell is staggering, and NVIDIA is racing to scale supply to meet the incredible demand. Blackwell is now in the hands of all major partners, who are working to bring up their data centers. Customers like Oracle, Microsoft, and Google are gearing up to deploy Blackwell at scale, with Oracle announcing the world’s first zettascale cloud computing clusters that can scale to over 131,000 Blackwell GPUs. Additionally, Nvidia sees continued strong demand for its Hopper architecture, with the H200 being the fastest growing and ramping product the company has seen. Hopper sales are expected to continue in Q4 alongside the Blackwell ramp. The company is facing supply constraints in its gaming business, which is expected to result in a sequential decline in gaming revenue in Q4. However, Nvidia expects to be “back on track with more supply” as it turns the corner into the new calendar year.
The computing stack is undergoing a fundamental reinvention from coding on CPUs to machine learning on GPUs, driving a trillion-dollar rebuild of traditional data center infrastructure. Additionally, “the age of generative AI is in full steam”, creating a new multi-trillion dollar industry with AI factories manufacturing digital intelligence, driving exponential growth in demand for NVIDIA’s AI computing platforms.
Overall, NVIDIA is seeing exceptional growth driven by the adoption of its accelerated computing and AI technologies across data centers, cloud, enterprise, and industrial applications. The company is focused on continuing to execute on its annual roadmap to drive performance and cost improvements.
