Nvidia Announces $57B Revenue and Sparks Market Tension  ## Metadata - Author: [[Hard Fork AI]] - Full Title: Nvidia Announces $57B Revenue and Sparks Market Tension - Category: #podcasts - URL: https://share.snipd.com/episode/642ff413-ad16-4f9a-88d0-204802af405a ## Document Notes ## Highlights - **Investment Feedback Loop** - Jaeden Schafer notes NVIDIA often invests in AI companies that later spend on NVIDIA products, creating a feedback loop. - He shares this pattern as a reason the Transcript: Jaeden Schafer And NVIDIA continues to just shock people and keeps the market rally going forever, partly because they keep giving money to AI companies who turn around and give it back to them. Every single AI company, major AI company I feel like I see these days has raised around. NVIDIA has invested into them. So the gravy train does keep rolling. Anyways, we're gonna get into all of that on the podcast today. But before we do, make sure to go check out AIbox.ai. If you want to try any of the top AI models I talk about on the show for $20 a month, I've heard a lot of people complain that I talk about too many AI companies. So if you want to try all of them, and it's, you know, expensive to sign up for subscriptions on all of them. If you want to try them all for $20 a month, go check out my own startup, which is AIbox.ai. There's a link in the description. ([Time 0:00:27](https://share.snipd.com/snip/b5fb676f-2bfb-4789-acec-126e0c0d4806)) - **Data Center Sales Drive Record Revenue** - NVIDIA reported $57 billion in Q3 revenue, up ~60% year-over-year and beating expectations. - Jaeden Schafer highlights that data center sales drove this surge, showing AI compute is the dominant revenue source. Transcript: Jaeden Schafer NVIDIA reported $57 billion in third quarter revenue. That's 60% higher compared to the same quarter last year. 62% higher compared to last year when everyone said it was a bubble that was about to pop and, you know, it's getting out of control. The company's net income on a GAAP basis was $32 billion. And again, that is 65% higher year over year. So both the revenue and their profits beat results, you know, and Wall Street's expectations, basically. And I think this really shows a company that is growing at an insane rate. I think a big part of this is because of its data center business. Revenue generated by NVIDIA's data center business was a record $51 billion. That's up 25% from the previous quarter and also up 66% from a year ago. ([Time 0:01:43](https://share.snipd.com/snip/08a08845-b1d2-4242-a952-1507a25a685e)) - **AI Infrastructure Outpaces Gaming And Auto** - NVIDIA's data center business generated a record $51 billion, dwarfing gaming and automotive revenues. - This concentration indicates enterprise AI infrastructure is the primary growth engine for the company. Transcript: Jaeden Schafer Revenue generated by NVIDIA's data center business was a record $51 billion. That's up 25% from the previous quarter and also up 66% from a year ago. So $51 billion is from their data center business. $5.8 billion came from NVIDIA's gaming business. And then $4.2 billion was followed by sales in professional visualization and automotive. So they have a handful of different places where they're getting money from, but like professional visualization, automotive, those kind of sales in those areas, that's only $4 billion, Only like $5 billion in the gaming, and $51 billion from the data center business. ([Time 0:02:21](https://share.snipd.com/snip/3b8de45b-74d0-467e-b377-9b1cd8c855b2)) - **Company Frames Growth As Industry Tailwind** - NVIDIA attributes growth to accelerating compute needs, new foundational models, and agentic applications. - Jaeden Schafer notes the company claims a broad industry tailwind fueling sustained GPU demand. Transcript: Jaeden Schafer During their Q3 call, Kress also said that in the last quarter, the company had announced an AI factory and a bunch of infrastructure projects, which amounted to like total if you bring Them all together, 5 million GPUs. She said, quote, this demand spans every market, CSP, sovereigns, modern builders, enterprises, and supercomputing centers and includes multiple landmark build outs. So then we get to Blackwell Ultra, which is a GPU that they kind of unveiled this whole thing back in March. And it is available in a bunch of different that you can configure it a couple different ways, essentially. And it has been really, really popular. It's now the leader within the company, I think it's one of their like most popular products. Previous versions of the Blackwell architecture were also very popular back then. But they're also very, they have strong demand today, according to Nvidia. ([Time 0:03:26](https://share.snipd.com/snip/24c8111f-673d-4447-af0f-d200b432a0f9)) - **Blackwell GPUs Fuel A 'Virtuous Cycle'** - Blackwell Ultra GPUs are extremely popular and cloud GPUs are reportedly sold out. - Jaeden Schafer emphasizes Jensen Huang's claim that compute demand is compounding across training and inference. Transcript: Jaeden Schafer So then we get to Blackwell Ultra, which is a GPU that they kind of unveiled this whole thing back in March. And it is available in a bunch of different that you can configure it a couple different ways, essentially. And it has been really, really popular. It's now the leader within the company, I think it's one of their like most popular products. Previous versions of the Blackwell architecture were also very popular back then. But they're also very, they have strong demand today, according to Nvidia. So it doesn't seem like even some of their older chips are slowing down. And maybe this has to do with the fact that it's almost impossible to get as many Blackwell Ultra GPUs as you want. And so people will just buy the older one. The CEO Jensen said that the sales of Blackwell GPU chips are quote, off the charts. So obviously, they're making a lot of money. He said, Blackwell sales are off the charts and cloud GPUs are sold out. Compute demand keeps accelerating and compounding across training and inference, each growing exponentially. ([Time 0:03:51](https://share.snipd.com/snip/7fe15933-4f33-43f1-81dd-a7b2773c8968)) - **China Restrictions Hurt H20 Sales** - NVIDIA faced weaker-than-expected H20 sales after geopolitical restrictions prevented shipments to China. - Jaeden Schafer reports Colette Kress cited both geopolitical issues and growing Chinese competition for the shortfall. Transcript: Jaeden Schafer Essentially, they created kind of this data center GPU, and it was designed for AI, but also high performance computing. It was designed to, you know, hit all of America's regulatory export controls. Donald Trump, I believe, had to come in and, you know, authorize the sale of this thing to China. And they had a bit of a disappointment. They were at 50 million. And this is because of they were essentially not able to sell it to China. China banned it. And so they, you know, had an issue there. This is a quote from Kress on the topic. Quote, sizable purchase orders never materialized in the quarter due to a geopolitical issue and the increasingly competitive market in China. We were disappointed in the current state that prevents us from shipping more competitive data center compute products to China, we are committed to continued engagement with the US and China governments and will continue to advocate for America's ability to compete around the world. ([Time 0:05:48](https://share.snipd.com/snip/edaa8fa5-b2af-4cfe-9549-e6f2033a34c2)) - **Prepare For Continued AI Compute Spending** - Expect continued GPU and data center spending if the economy and interest rates improve. - Jaeden Schafer suggests investors should brace for ongoing industry growth and elevated demand. Transcript: Jaeden Schafer I think what's really important is that NVIDIA right now is forecasting more growth. They have projected revenue of $65 billion in the fourth quarter. So that's, I mean, that's what's going on right now. And I think this is going to help push the share price up more in the future. I think after trading, when they did this, it was up already 4% in the after hours. So like the stock price reacted to this immediately by continuing to increase. A lot of people say that this is a bubble, but it does seem like more and more money is being made. And Jensen actually directly commented on this. He said, quote there's been a lot of talk about an AI bubble from our vantage point. We see something very different. And on the one hand, I think all of us want to say this is an AI bubble. Way too much money is being spent here. There's no way that the productivity gains are going to be realized. But on the other hand, the money is being spent, the data center is being built nvidia is selling the chips and whether or not this continues forever in like in at the current moment it Seems like these ai companies cannot get enough chips and compute and the spending will continue i think especially if the economy improves and perhaps interest rates come down i don't Think we're going to see a slowdown in the spending. ([Time 0:07:10](https://share.snipd.com/snip/58e0fb11-2522-4ba2-8041-4444884ec4f4))