Nvidia will see significant growth as it ramps up the rollout of its new GPU Blackwell. Analysts predict that shipments will jump in the fourth and first quarters, increasing from 150,000 to 200,000 in the fourth quarter to 750,000 to 800,000 in the first quarter. This surge could push Nvidia’s data center revenue to a staggering $200 billion by 2025.
Nvidia expects significant growth with rollout of Blackwell GPUs
Multiple factors contribute to this expected growth. Blackwell has already shown superior performance potential compared to its predecessor Hopper, and Nvidia is benefiting from a favorable market environment characterized by increased demand for AI infrastructure and GPU capabilities. Analysts say Blackwell’s pricing power and increased production will further support Nvidia’s upward trajectory. Additionally, as the fiscal year ends early next year, the market will start to focus on 2026 forecasts, which may be underestimated due to the rise of Blackwell.
Despite some recent volatility, with its stock price down 8.5% over the past month, NVIDIA remains in a strong position. According to Yahoo Finance’s Opening Bid Podcast, Bank of America analyst Vivek Arya said the recent decline was due to internal commitment issues and broader market factors such as concerns about exposure to China. He said it was due to both. However, Arya asserted that these challenges are temporary and part of the transition to a new product generation.
Arya said that despite being recognized as a cutting-edge product, NVIDIA has struggled with a smooth transition to Blackwell, and there remains uncertainty around customer access and execution. These issues have raised questions about the rollout, but optimism remains high. Arya notes that “94% of sell-side analysts rate Nvidia stock a buy or strong buy,” indicating strong overall confidence in the company.
Nvidia’s performance in 2024 will likely be critical to its future. While Blackwell is on track to complete its implementation, analysts expect shipments to increase in coming quarters as gross margin issues improve. Once Blackwell is fully operational, predictions are borne out that Nvidia could achieve strong sales in 2025. All eyes will be on how the company navigates the coming months, with positive momentum expected from key upcoming events such as Nvidia CEO Jensen Huang’s keynote at CES 2025.
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Market trends and Nvidia’s strategy
Despite the challenges faced, NVIDIA is preparing to take full advantage of anticipated market trends. The company’s continued investment in AI capex positions it well as demand for advanced GPU clusters increases. This is in contrast to market competitors such as AMD and Broadcom. These companies are expanding their product offerings, but may not yet capture the diverse demands driven by AI.
Nvidia stock currently trades at a multiple of 30x, reflecting expected 2026 earnings of $4.43. This valuation is the lowest since May 2024, when the stock traded at $95. Questions have been raised about whether the market has properly considered Blackwell’s potential impact. Analysts have already predicted that Blackwell will effectively dwarf Hopper’s previous contributions, confirming Nvidia’s industry leadership.
Nvidia’s potential is clear, but it also faces potential market volatility, especially as it integrates Blackwell into its product lineup. Historical trends show that when the semiconductor sector diverges from broader market performance, it often precedes volatility. This is especially important now, as the semiconductor sector is exhibiting one of the largest periods of divergence since 2000. NVIDIA continues to be an important part of the semiconductor industry, but it’s important to stay in sync with overall market trends.
Focused on two trajectories: growing demand for AI-enabled solutions and addressing market pressures, Nvidia is strengthening its presence in the technology space.
While any transition comes with growing pains, Nvidia’s trajectory points to significant opportunities ahead. As we prepare for a potentially transformative year in 2025, the investment community remains focused on execution. Current signals regarding Blackwell’s shipping and revenue forecasts are sparking renewed optimism.
If you’re considering buying Nvidia stock, the timing of your entry depends on whether you’re confident in the company’s ability to meet near-term challenges and capitalize on rapid growth ahead. The next 12 months could be critical, as Blackwell could redefine Nvidia’s dominance in the GPU market and expectations for significant revenue growth in the data center space. Current valuations reflect some degree of caution due to recent execution disruptions, but analysts’ strong buy ratings and the company’s long-term position in AI infrastructure suggest that Blackwell’s impact will be fully realized. This could be a compelling reason to invest ahead.
How Nvidia navigates these changing dynamics remains a key point of interest.
Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not recommend any particular investment strategy or make recommendations regarding the purchase or sale of securities.
Featured image credit: Nvidia
