The stock is down $2.30 (-1.89%) at $119.37.
From the Wall Street Journal, March 16:
Chips to be unveiled at developer conference expected to drive growth next year and beyond, but will depend on Big Tech’s spending spigot staying on full blast
Nvidia (NVDA) has barely started shipping its latest artificial intelligence chips, and everybody is already looking to hear about the next ones. For the world’s most valuable semiconductor company, that is a high-quality problem.
Nvidia’s annual GTC developers conference in San Jose, Calif., used to be a relatively modest affair, drawing about 9,000 people in its last year before the Covid outbreak. But the event now unofficially dubbed “AI Woodstock” is expected to bring more than 25,000 in-person attendees flocking to the company’s backyard this week, all lining up to hear what the AI kingmaker has up its sleeve for the months and years ahead.
Nvidia’s Blackwell AI chips, the main showcase of last year’s GTC conference, have only recently started shipping in high volume following delays related to the mass production of their complicated design. Blackwell is expected to be the main anchor of Nvidia’s AI business through next year. Analysts expect Nvidia Chief Executive Jensen Huang to showcase a revved-up version of that family called Blackwell Ultra at his keynote address on Tuesday.
But Nvidia watchers are especially eager to hear more about the next generation of AI chips called Rubin, which Nvidia has only teased at in prior events. Ross Seymore of Deutsche Bank expects the Rubin family to show “very impressive performance improvements” over Blackwell. Atif Malik of Citigroup notes that Blackwell provided 30 times faster performance than the company’s previous generation on AI inferencing, which is when trained AI models generate output. “We don’t rule out Rubin seeing similar improvement,” Malik wrote in a note to clients this month.
Rubin products aren’t expected to start shipping until next year. But much is already expected of the lineup; analysts forecast Nvidia’s data-center business will hit about $237 billion in revenue for the fiscal year ending in January of 2027, more than double its current size. The same segment is expected to eclipse $300 billion in annual revenue two years later, according to consensus estimates from Visible Alpha. That would imply an average annual growth rate of 30% over the next four years, for a business that has already exploded more than sevenfold over the last two.
High marks, to be sure. And doable—if the world’s largest tech giants keep dumping significant amounts of capital investments on AI infrastructure. But by that point, such spending will only be justified if there is substantial demand from consumers and businesses for generative AI services, and a willingness to pay a premium for them.
Such an outcome is still a bit iffy, especially with the potential for the global economy to slip into a recession sparked by tariffs, geopolitical instability and inflation. Nvidia has also been haunted by worries about competition with in-house chips designed by its biggest customers like Amazon and Google. Another concern has been the efficiency breakthroughs claimed by Chinese AI startup DeepSeek, which would seemingly lessen the need for the types of AI chip clusters that Nvidia sells for top dollar. Nvidia’s stock has actually picked up some gains against the market’s turbulence in recent days, but the shares are still down more than 9% so far this year, more than double the S&P 500’s decline....
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Also at the Journal:
How Nvidia Adapted Its Chips to Stay Ahead
Everyone’s Rattled by the Rise of DeepSeek—Except Nvidia
