[Peace&Chips] 'AI Daejangju' Nvidia Answers Market Concerns with Earnings

NVIDIA Reports Strong Earnings Driven by AI Demand
Advances New Product Roadmap to Lead Market

Dell Integrates Blackwell GPU in New Server Products
"No Alternative to NVIDIA for Accelerated Computing"

U.S. Nvidia announced strong earnings for the first quarter of fiscal year 2025 (February to April) on the 22nd (local time), causing the market to buzz continuously. Although the growth in earnings was anticipated, the results far exceeded market expectations, drawing attention from both inside and outside the industry once again.

Nvidia's operating profit for this quarter increased by 690% compared to the same period last year, reaching $1.699 billion. This surge is rarely seen not only in the semiconductor sector but also in other industries' corporate earnings. Colette Kress, Nvidia's Chief Financial Officer (CFO), highlighted the remarkable growth in the data center segment, which includes the graphics processing unit (GPU) business, stating that "the increase in shipments of the Hopper GPU computing platform, used for training and inference in large language models (LLM), recommendation engines, and generative AI applications, contributed to this result."

Jensen Huang, CEO of NVIDIA
Photo by Yonhap News

Reflecting this trend, Nvidia's stock price surpassed $1,000 intraday for the first time on the 22nd. On the 23rd, it closed at a new record high of $1,037.99. The stock price rose by 9.32% compared to the previous day. Although the stock price has been volatile over the past year, this is the first time the increase rate has been this high. Consequently, the market capitalization also reached $2.5533 trillion, heading toward the $3 trillion mark.

During the earnings announcement, Nvidia hinted that this growth trend is not a one-time event. Recently, as major U.S. big tech companies have introduced their own AI semiconductors, concerns arose about how long Nvidia's monopoly in the market would last. In response to such market evaluations, Nvidia unveiled a GPU product roadmap that will be its next growth driver. They announced plans to boost performance within the year through shipments of the Blackwell series, the next generation following the currently widely used Hopper series. They also revealed plans to accelerate the product release cycle from two years to about one year to lead market trends.

Server products equipped with Blackwell are also being unveiled one after another. Dell Technologies, the world's number one server market leader, revealed its new product 'Dell PowerEdge XE9680L' at an event held last week in Las Vegas, USA. This product reportedly includes multiple Blackwell GPUs. The announcement made it clear why Nvidia is confident that demand for Blackwell will exceed supply next year.

As Nvidia's confidence is proven by its performance, the market is showing more recognition than concern. Cha Min-sook and Hwang Jun-tae, researchers at Korea Investment & Securities, said, "We are currently in the early stages of a new application called AI." They added, "As accelerated computing through AI spreads across various industries, Nvidia's market dominance will grow," and evaluated that "there is currently no substitute for Nvidia in accelerated computing."

Editor's NoteSemiconductors, often called the rice of modern industry. Although we hear the term daily, it is hard to explain it clearly. Peace & Chips will make the complex concepts and overall trends of the semiconductor industry easy to digest. Just bring your spoon.