4 key takeaways from Nvidia’s earnings call

After Nvidia (NVDA) announced that first-quarter results exceeded high expectations, CEO Jensen Huang and other executives joined the chipmaker’s earnings call to talk about the Blackwell implementation, allaying concerns about ” air pocket” in demand and how sovereign artificial intelligence (AI) and multimodality are positive drivers for Nvidia and what comes next after Blackwell.

Blackwell’s revenue will be realized this year

Nvidia said the Blackwell platform, unveiled in March, is in “full production” and on track to be delivered to partners this year.

Huang explained that the new system will be for production deliveries starting in the second quarter and will be rolled out in the third quarter. He indicated that customers should install Blackwell in their data centers in the last quarter of fiscal year 2025.

Asked whether investors should expect Blackwell to impact revenues, Huang said: “We will see strong revenues for Blackwell this year.”

Huang dismisses “air pocket” concerns, citing easy transition, customer readiness and strong demand

With Blackwell in production, some investors have expressed concerns that Nvidia could face an “air pocket” in sales as some customers wait for the latest technology rather than buy Blackwell’s predecessor, Hopper.

When asked about the next-generation platform’s rollout, Huang emphasized that Blackwell is designed to be “backwards compatible” with systems already using Hopper to ease the transition for Nvidia customers.

The CEO added that the chipmaker is “priming the pump” by getting the customer ecosystem ready for the new platform to get them ready for liquid cooling.

Colette Kress Nvidia CFO Colette Kress noted that the company believes “demand for H2000 and Blackwell far exceeds supply” and expects this to continue “well into next year.”

Sovereign AI and multimodality are positive drivers

Nvida executives pointed to sovereign AI, or a country’s ability to create artificial intelligence using its own infrastructure and data, as well as new multimodal capabilities, as positive drivers for the chipmaker.

The company said sovereign AI, which could be particularly attractive as data privacy concerns come into focus, helps diversify data center revenues and drive demand for its products amid rising use of AI computing power.

Huang said that as generative artificial intelligence (genAI) capabilities develop and become multimodal, the demand for Nvidia’s computing power will increase. Microsoft-backed (MSFT) OpenAI and Alphabet (GOOGL) Google recently unveiled AI tools with audio and vision capabilities.

New chip from Blackwell

When asked about Nvidia’s long-term innovation plans, Huang said it “may announce that there will be another chip after Blackwell,” saying the company operates on an “annual cadence.” He also noted that investors can “count on (Nvidia) introducing new networking technologies very quickly.”

The CEO said the chipmaker is “committed” to Ethernet technology and highlighted its “rich ecosystem of partners,” citing Dell Technologies (DELL), which recently announced the expansion of its artificial intelligence factory with Nvidia. Huang emphasized that the chipmaker’s Spectrum-X Ethernet networking fabric will be used in Dell’s artificial intelligence factory.

Nvidia shares rose 5.8% to $1,004.65 in extended trading from 7:30 p.m. ET Wednesday after the company’s earnings announcement.