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Globe and Mail
29-05-2025
- Automotive
- Globe and Mail
Why Nvidia Stock Could Keep Climbing Despite the China Setback
Nvidia (NVDA) just wrapped up another blockbuster quarter, reflecting strong demand for its AI-focused chips even as the company faces fresh challenges in China. For the first quarter, Nvidia reported $44.1 billion in revenue, a staggering 69% year-over-year jump and 12% sequential growth. The company's data center segment continues to witness massive growth. The business reported revenue of $39.1 billion, up 73% from the same period last year. This surge reflects solid demand for Nvidia's artificial intelligence (AI) infrastructure. The momentum in Nvidia's data center business was led by the rapid rollout of its Blackwell architecture, the fastest product ramp in the company's history. Blackwell contributed about 70% of Nvidia's data center compute revenue in Q1. Major cloud providers are deploying Blackwell GPUs at scale. Nvidia's networking business was another bright spot. Revenue in this segment climbed 64% sequentially, reaching $5 billion in Q1. This growth reflects the growing adoption of its fastest switch, NVLink, and the strong uptake of its Ethernet-based Spectrum-X platform. Spectrum-X is now generating over $8 billion in annualized revenue and continues to attract top-tier customers, including major cloud service providers and consumer Internet companies. Gaming, too, had a strong showing. Revenue hit a record $3.8 billion, up 42% year-over-year. The Blackwell architecture is now powering a new generation of GeForce RTX GPUs. With growing enthusiasm from users, Nvidia is capitalizing on its massive installed base of GeForce users. In the automotive sector, Nvidia reported $567 million in revenue, up 72% year-over-year, driven by growing demand for self-driving technologies and electric vehicles. The company has partnered with several top players in the automotive sector, and the segment is expected to deliver solid growth in the years to come. China Setback: A Multibillion-Dollar Blow for Nvidia However, Nvidia's otherwise stellar quarter was not without turbulence. The company took a $4.5 billion charge tied to its H20 GPU, a data center chip designed specifically for the China market. The U.S. government imposed new export restrictions, leaving Nvidia unable to ship $2.5 billion worth of H20 inventory. While Nvidia managed to record $4.6 billion in H20 revenue before the deadline, the sudden halt dealt a significant blow to its China business. The company warned that losing access to China's AI accelerator market, which could expand to $50 billion, will have a material impact on future performance. Solid Product Roadmap Despite this headwind, Nvidia's innovation pipeline remains strong. Sampling has already begun for the next iteration of its AI hardware, the GB300. Designed as a drop-in upgrade to GB200 systems, the GB300 will offer improved performance and will likely see solid adoption. With production shipments expected to begin later this quarter, Nvidia remains on track with its product release schedule. Looking beyond data centers and gaming, Nvidia is expanding its footprint in professional visualization, automotive, and robotics. Its AI workstations are also likely to witness strong demand. NVDA's Forward Guidance Signals Continued Strength Looking ahead, Nvidia forecasts second-quarter revenue of $45 billion, representing a 50% year-over-year increase, with continued momentum in its data center business. The ramp of Blackwell is expected to offset further declines in China-related sales. The company estimates it will forgo about $8 billion in revenue this quarter due to the ongoing export restrictions. Wall Street Remains Bullish on Nvidia Stock Despite the China setback, Wall Street remains optimistic. Analysts maintain a 'Strong Buy' consensus on Nvidia stock. As more workloads move toward inference and AI agents become more common, the demand for AI computing is expected to grow rapidly, supporting Nvidia's financial performance. Conclusion Nvidia's latest earnings report indicates that demand for AI computing is expected to accelerate, supporting its growth. While the loss of the Chinese market presents a significant near-term challenge, Nvidia's ability to drive record growth across its data center, networking, gaming, and automotive segments highlights the resilience and depth of its business. The rapid adoption of its Blackwell architecture and the upcoming launch of the GB300 chip further strengthen its leadership in the AI space. As AI adoption continues to surge, Nvidia is well-positioned to capitalize on expanding demand, which will likely drive its share price higher.
Globe and Mail
25-05-2025
- Business
- Globe and Mail
3 No-Brainer Cloud Computing Stocks to Buy Right Now
One of the fastest-growing areas in tech today is cloud computing. In simplest terms, cloud computing is the delivery of computing services over the internet. It's an infrastructure-as-a-service model where customers can pool resources, such as processing power and storage, and are able to scale their usage up and down quickly. It is attractive to many organizations because they don't have to buy and maintain their own servers and storage systems. Cloud computing is a high-fixed-cost business that benefits from economies of scale. When these businesses achieve enough scale to cover their fixed costs, they then see a lot of operating leverage, where their profitability growth greatly exceeds their revenue growth. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » While there has been a continued shift of organizations moving from on-premise solutions to the cloud, the advent of artificial intelligence (AI) has really kick-started strong growth for the sector. The reason is that customers are using cloud computing services to customize foundational AI models or create their own models and apps, and then run their AI workloads through their infrastructure. While not without risks, this is a huge megatrend that is benefiting several companies. One risk would be overbuilding data center capacity that does not get used, although some cloud providers have argued that the bigger risk is underinvesting and falling behind. Let's look at three no-brainer ways to play the cloud computing trend. 1. Amazon Amazon (NASDAQ: AMZN) created the cloud computing industry following its own struggles to scale its infrastructure needs, and today it is the largest cloud computing service in the world, with nearly a 30% market share. While best known for its e-commerce operations, its Amazon Web Services (AWS) cloud computing segment is both its largest by profitability and its fastest growing. Last quarter, AWS revenue rose 17% year over year to $29.3 billion, while operating income climbed 22% to $11.5 billion. AWS' growth is being powered by its Bedrock and SageMaker solutions. Bedrock lets customers tap into top AI foundation models from both Amazon as well as third parties, which they can then customize for their own needs. SageMaker, meanwhile, gives users the tools to build and train their own models from the ground up. Amazon, through its Annapurna Labs division, has also built its own custom AI chips to power its cloud business. Its Trainium chip is designed to train large AI models, while its Inferentia chip is built to run AI inference. Custom chips are more efficient and use less power than mass-market graphics processing units (GPUs), giving Amazon a cost advantage. 2. Microsoft While AWS remains the largest cloud computing business in the world, Microsoft (NASDAQ: MSFT) Azure has been gaining market share in the space. Azure revenue has climbed by 30% or more for each of the past seven quarters, including by 33% last quarter, bringing its market share to around 22%. The company's partnership with leading AI foundational model company OpenAI has helped set it apart. Its platform gives direct access to OpenAI's leading AI models, so that customers can integrate them securely into their applications. It's also embedded OpenAI's models throughout its ecosystem, including with its popular GitHub code repository that is run on Azure. Microsoft is now looking to branch out. It began hosting models from Elon Musk's xAI, and it hired the co-founder of DeepMind to start developing its own AI models. While this move carries some risk, diversifying its AI portfolio and forging its own AI path should be a big opportunity. 3. Alphabet While some investors worry about the impact of AI of its search business, there is no denying that AI is helping power Alphabet 's (NASDAQ: GOOGL)(NASDAQ: GOOG) cloud computing division, Google Cloud. The smallest of the big three cloud computing businesses, with about a 12% market share, Google Cloud has recently reached a profitability inflection point. This could be seen in its first-quarter results, when Google Cloud revenue climbed 28% year over year to $12.3 billion, while its segment operating income surged 142% to $2.2 billion. Like its competitors, the company benefits from the growing demand for AI services. The company's Vertex AI machine learning platform, analytics tools like BigQuery, and leadership in Kubernetes help set it apart. Google developed Kubernetes to run and automatically manage apps on containers, which are software packages that bundle apps with everything they need to run. Vertex AI, meanwhile, is Google Cloud's end-to-end machine learning platform that lets customers easily build, deploy, and manage AI models. Alphabet has also developed one of the most advanced foundation AI models with Gemini, which Google Cloud customers can fine-tune for their own custom models and apps. With the help of Broadcom, it has also developed its own custom AI chips to help lower costs. Now, notably, search is still the largest part of Alphabet's business, and some investors fear it is getting disrupted by AI. However, I think investors are overlooking the distribution (Google is the default search engine for most devices and browsers) and network (its ad network can reach anything from a local to a global audience) advantages it has. Meanwhile, Google Cloud looks poised to just grow bigger and bigger. Should you invest $1,000 in Amazon right now? Before you buy stock in Amazon, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor 's total average return is957% — a market-crushing outperformance compared to167%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of May 19, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Yahoo
14-05-2025
- Business
- Yahoo
Nvidia (NVDA) Hikes GPU Prices as China Ban Triggers $5.5B Loss
Nvidia (NVDA, Financials) raised prices across its graphics cards and datacenter chips to offset a $5.5 billion hit tied to U.S. export bans and rising costs at Taiwan Semiconductor Manufacturing Company's Arizona plant. Warning! GuruFocus has detected 3 Warning Signs with NVDA. Prices for Nvidia's GeForce RTX 5090 jumped more than 10%, from NT$90,000 to NT$100,000 ($2,966 to $3,295). Other RTX 50-series GPUs rose 510%, while H200 and B200 datacenter modules climbed 1015%, according to supply chain sources cited by Digitimes Taiwan. The company expects fiscal Q1 2025 revenue to reach $43 billion, up from $39.3 billion in the prior quarter, signaling approximately 65% year-over-year growth. Nvidia took a $5.5 billion revenue loss after the U.S. blocked shipments of its H20 chips to China. To preserve margins, the company authorized board partners to mirror official price hikes. Despite the disruption, demand for AI chips from cloud providers remains strong. Analysts expect Nvidia's quarterly results due in late May to align with prior guidance and show excellent profit performance. Investors will be watching to see whether AI-related demand can continue to offset geopolitical headwinds and higher production costs. Explore valuation charts for NVDA. View insider trades for NVDA. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
