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Wall Street is rapidly pivoting away from gnashing its proverbial teeth over NVIDIA’s peaking margins just a few weeks back to now rushing to incorporate the Blackwell production ramp-up in its collective bullish thesis, replete with expectations of a phenomenal surge in revenue from the GPU manufacturer’s latest flagship product.
For the benefit of those who might not be aware, the rumors of a Blackwell architecture design flaw had dominated the narrative around NVIDIA throughout the summer, with analysts contending that the flaw’s rectification would relegate the Blackwell production ramp-up to a predominantly calendar year 2025 phenomenon.
Then, while announcing its earnings for the June-ending quarter, NVIDIA confirmed the rumors of a minor design flaw but noted that the shortcomings were rectified by making a few minor changes to the photomask – a specific template that is used to create bespoke patterns on semiconductor wafers. Critically, the company announced at the time that it expected to start shipping Blackwell products in the December-ending quarter, with Hopper shipments also expected to increase.
$NVDA Morgan Stanley says Hopper/Blackwell demand is strong
– Nvidia’s Blackwell chips are now entering volume production, with demand from major customers driving significant growth potential for the company
– The Hopper H200 chips are seeing increased demand from smaller…
— Kaushik (@BigBullCap) September 24, 2024
Now, Wall Street appears to be front-running NVIDIA’s relatively cautious guidance by going a giant step forward. To wit, Morgan Stanley has now disclosed that it expects NVIDIA to ship 450,000 Blackwell chips in the December-ending quarter, earning ~$10 billion in revenue from this architecture alone:
“Blackwell chips are expected to see 450,000 units produced in the fourth quarter of 2024, translating into a potential revenue opportunity exceeding $10 billion for NVIDIA.”
While Morgan Stanley concedes that NVIDIA is still in the process of resolving a few “technical challenges” with its GB200 server racks, the Wall Street titan posits a qualifier that such issues are a part of a “normal debugging process for new product launches.”
What’s more, Morgan Stanley still sees a very healthy demand profile for NVIDIA’s H200 chips, courtesy of sovereign AI projects and smaller cloud service providers continuing to expand their capacity.
Source: wccftech.com
