Nvidia cracks 30 billion US dollars, but admits Blackwell problems
Nvidia continues to grow at a rapid pace. Turnover has more than doubled compared to 2023, the outlook is mixed.
Nvidia's Blackwell generation (shown here as a render) is not yet ready for its prime time.
(Image: Nvidia)
For the first time in the company's history, Nvidia achieved a turnover of 30 billion US dollars in a single quarter. The operating profit of 18.6 billion dollars and the net profit of 16.6 billion dollars are also records.
The comparisons with the previous year are particularly impressive because the AI hype was just beginning at that time – this is responsible for the rapid growth because Nvidia is the main supplier of accelerators for AI training. Year-on-year, sales increased by 122 percent, operating profit by 174 percent and net profit by 168 percent. The operating cash flow increases by 128 percent to 14.5 billion dollars. Liquid assets (cash and cash equivalents) grow from 5.9 to 8.6 billion dollars in one year.
Sales distribution: Data Center remains king
According to Nvidia's announcement, interest in the Hopper platform (H100, H200, GH200 etc.) remains high. Sales of data center products grew to 26.3 billion dollars – +154 percent compared to the same period last year and +16 percent compared to the previous quarter. Both the accelerator division (22.6 billion dollars) and the network group around the acquired company Mellanox (3.7 billion dollars) are growing.
All other divisions are also doing well: within a year, the gaming division with its GeForce graphics cards grew by 16 percent to a turnover of almost 2.9 billion dollars. Far behind are professional graphics cards (454 million dollars, +20%) and automotive chips (346 million dollars, +37%).
(Image: Nvidia)
Blackwell needs new exposure masks
In the annual report, Nvidia finally admits that not everything is running smoothly with the new Blackwell accelerator generation (B100 and B200): "We have made a change to the Blackwell GPU mask to improve production yield." The yield was apparently so poor that "inventory provisions of Blackwell material with poor yield" had a negative impact on the gross margin. It fell from 78.9% to a still enormously high 75.7% within a single quarter.
At this week's Hot Chips trade fair, rumors were circulating that the yield has so far been below ten percent – an obscenely poor and uneconomical figure, especially considering the mature 4-nanometer process. Too densely packed transistors are said to be to blame. This fits in with Nvidia's statement that the chip contract manufacturer TSMC has created new exposure masks. At the beginning of the month, Nvidia contradicted rumors of delays due to production problems.
Slight decline on the stock market
Series production is now set to start in the fourth fiscal quarter; Nvidia is expecting the first billion-euro sales with Blackwell. The fiscal quarter runs from November 2024 to the end of January 2025 and the Hopper accelerators are expected to sell well in parallel.
In the current quarter (third of fiscal year 2025), Nvidia expects sales of 32.5 billion dollars (+/- 2 percent). The stock market is unlikely to like the Blackwell concessions in particular: The share price fell by a good five percent in after-hours trading.
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