Nvidia (NVDA) stock rose as much as 3% premarket Thursday after the company's fourth quarter earnings topped Wall Street's expectations and showed the AI chipmaker has begun producing its Blackwell AI products at scale.
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At close: February 26 at 4:00:01 PM EST
Nvidia's Blackwell AI GPUs [graphics processing units] contributed $11 billion to the company's quarterly revenue in what CFO Colette Kress said was "the fastest product ramp in our company’s history."
Nvidia had previously said it expected Blackwell to contribute several billion dollars in sales in its fourth quarter.
That feat comes after design flaws reportedly pushed production back a quarter, and a report from the Information in January said overheating issues and glitches with its massive GB200 server racks with the Blackwell chips was prompting customers to cut orders, spurring fears of further delays ahead of Nvidia's earnings report Wednesday.
But those fears were assuaged as the company said Blackwell is "fully ramped," and the company's revenue of $39.3 billion and earnings per share of $0.89 topped Wall Street's estimates, according to Bloomberg consensus estimates.
The stock had risen 3.7% Wednesday, ahead of the chipmakers earnings report after the bell. Nvidia shares had suffered declines the prior week as inflation fears drove down major indexes.
CEO Jensen Huang said it's "demand for Blackwell is extraordinary," and the company anticipates its total first quarter revenue will hit $43 billion, plus or minus 2%, above the $42.3 billion expected by Wall Street analysts, according to Bloomberg consensus data.
Stifel analyst Ruben Roy wrote in a note to investors late Wednesday: "[W]e believe the pace of the Blackwell ramp is notable given expectations for strong growth in F1Q following the strength seen in F4Q within the context of technical issues early in the production cycle." Roy reiterated his Buy rating on Nvidia stock and maintained his $180 price target.
Truist Securities analyst William Stein added that Nvidia's production accomplishment "de-risks the future ramps" of upcoming AI chips "by overcoming a transformation hurdle early."
Raymond James analyst Srini Pajjuri added that "Blackwell was particularly strong" in his own note to investors late Wednesday, and Citi analyst Atif Malik said the $11 billion Blackwell sales exceeded his expectations. Pajjuri and Malik maintained their Buy ratings on the stock.
"We think NVDA’s Blackwell will continue to see demand running well above supply," said Malik in a note early Thursday.
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