On Thursday, William Blair maintained an Outperform rating on NVIDIA (NASDAQ:NVDA), highlighting the anticipated success of the company's latest generation of chips, Blackwell. Despite a minimal contribution from these chips in the third quarter, with only 13,000 sample chips shipped, NVIDIA has resolved previous issues and is gearing up for production shipments in the fourth quarter, which are expected to continue into the next year.
NVIDIA's management has now projected that Blackwell revenue in the fourth quarter will surpass their earlier estimates of several billion dollars. This update follows the resolution of a mask issue that had previously impacted the chip's production. The optimism around Blackwell's revenue prospects reflects the company's confidence in its new product offering.
Looking ahead, NVIDIA anticipates that the demand for Blackwell will outstrip supply for several quarters due to supply limitations, particularly concerning CoWoS capacity at TSMC. This supply-demand imbalance is expected to persist going into fiscal 2026, suggesting a strong market interest in NVIDIA's latest technology.
The ramp-up of Blackwell production over the next two to three quarters is likely to create a temporary impact on NVIDIA's gross margins. The company forecasts a several-point headwind, with margins in the low-70% range. However, NVIDIA expects a rebound in the second half, with margins anticipated to return to the mid-70% level.
This positive outlook from William Blair comes as NVIDIA prepares to enhance its product lineup with the Blackwell chips, which are poised to contribute significantly to the company's revenue stream in the near future. The firm's analysis points to a strong performance for NVIDIA as it overcomes initial production challenges and meets the high demand for its latest innovation.
In other recent news, NVIDIA's robust financial performance has led to a series of analyst upgrades. Rosenblatt Securities increased its price target to $220, citing strong demand for NVIDIA's Hopper products and an anticipated supply ramp-up of its Blackwell product line. Cantor Fitzgerald maintained a bullish stance, reiterating an Overweight rating despite a slightly lower gross margin forecast for the April quarter.
Benchmark raised its price target to $190, highlighting NVIDIA's consistent fundamental performance and Needham increased its price target to $160, noting potential growth from the Hopper architecture.
Melius Research adjusted NVIDIA's price target to $195, pointing to significant revenue prospects from the Blackwell product line. Analysts from Goldman Sachs (NYSE:GS), Bernstein SocGen Group, Citi, and Deutsche Bank (ETR:DBKGn) also updated their stances, reflecting NVIDIA's strong financial performance and potential for continued growth.
In terms of earnings and revenue, NVIDIA reported record-breaking total revenue of $35.1 billion, surpassing expectations. The revenue outlook for the next quarter aligns with market forecasts at $37.5 billion. These recent developments underscore NVIDIA's strong financial performance and strategic position within the rapidly expanding AI industry.
InvestingPro Insights
NVIDIA's strong market position and financial performance are further underscored by recent data from InvestingPro. The company's revenue growth has been nothing short of spectacular, with a 194.69% increase in the last twelve months as of Q2 2025. This aligns with the article's discussion of NVIDIA's anticipated success with its Blackwell chips and the expected revenue surge.
InvestingPro Tips highlight NVIDIA's impressive gross profit margins, which stood at 75.98% in the same period. This metric supports the article's mention of NVIDIA's projected gross margins in the low-70% range during the Blackwell ramp-up, with expectations to return to the mid-70% level in the second half.
Additionally, NVIDIA's market capitalization of $3.57 trillion reflects its dominant position in the semiconductor industry, reinforcing the article's positive outlook on the company's future performance. The stock is trading near its 52-week high, with a price at 97.41% of its peak, indicating strong investor confidence in NVIDIA's growth trajectory.
For investors seeking a more comprehensive analysis, InvestingPro offers 22 additional tips on NVIDIA, providing deeper insights into the company's financial health and market position.
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