nvidia(NASDAQ: NVDA ) Another banging quarter was recently reported. The leading artificial intelligence (AI) company reported record quarterly sales of $35.1 billion for the period ended Oct. 27, after guiding investors to expect revenue to be around $32.5 billion in its fiscal 2025 third quarter.
Exceeding expectations has become the norm, however, as AI capital spending continues to grow. Analysts had already baked in another big quarter, and Nvidia stock shows great future success. Shares of Nvidia have fallen nearly 7% since the fiscal third quarter report, even after some very bullish comments from Nvidia CEO Jensen Huang during the earnings conference call.
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But it was the comments he made a week before Nvidia’s earnings report that should have investors most excited to own the stock. Huang was in Japan for an AI summit on November 12, and he presented a futuristic vision that gives investors a clear picture of why it’s not too late. Buy Nvidia stock.
While answering the questions Earnings call on November 20Huang addressed reports on manufacturing and quality-related issues for its latest Blackwell AI architecture. Blackwell’s success is critical to Nvidia going into next year. Huang had some good news on that front:
Blackwell production is in full steam. In fact … we will deliver more Blackwells this quarter than previously estimated. It is the case that the demand is greater than our supply.
When Huang was at an AI conference in Japan Softbank CEO Masayoshi Son said a week ago, however, how widespread he expects Blackwell and Nvidia’s other AI-related platforms to be.
Huang and Son have a history together. In fact, Huang half-joked during the fireside chat that the son “wanted to lend me money to buy Nvidia — all of it.” “Now I regret not raising you,” he told the son, “that was a good idea.” Son said the offer was made in 2016 shortly after SoftBank acquired the semiconductor chip designer. Arm Holdings For $32 billion. SoftBank still owns 90% of Arm after it goes public again in 2023.
Nvidia’s CEO made an even more important revelation at the conference. He announced: “Today we are announcing that we are partnering with SoftBank to bring and build an AI infrastructure to Japan. Together we are going to build Japan’s largest AI factory outside of Nvidia DGX.”
Nvidia DGX is the company’s AI enterprise platform. The company describes it as its “software, infrastructure, and expertise in a modern, integrated AI development solution.” It is essentially an enterprise platform where the AI rubber meets the road.
SoftBank will integrate Nvidia technology to add intelligence to its telecommunications network beyond just voice, data and video. It will be distributed across 200,000 SoftBank sites in Japan.
It plans to add an “AI Store” to make AI available to 55 million SoftBank customers. All are built on top of Nvidia’s AI Enterprise. The result will be an “AI grid” that will run across Japan. Huang called it “absolutely revolutionary”. “It’s the first of its kind to transform a telecommunications network, a communications network, into an AI network,” he said.
This is an example of how Nvidia’s business can maintain its growth momentum. The applications are endless. From customer service to helping manage and control a network of self-driving cars.
Huang presented an example where entire factories could become an AI system using cameras and large language models. Managers can “talk” to the factory to see what’s going on, if there’s anything unusual at the site, if there was an accident, or just to get daily reports. The concept can also extend to other physical objects such as a road, a stadium, an office, or a building.
Investors wondering if Nvidia stock is already too high should consider the potential benefits that could come from enterprise AI. This next phase is already underway. Nvidia CFO Colette Kress told investors during the quarterly call that the company has sent its first Blackwell DGX engineering samples to artificial intelligence development company OpenAI.
Huang’s optimism about his company’s future is understandable. These AI assisted projects are only going to grow. Any investor with a portfolio that includes a development component should hold Nvidia as part of it.
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