Financial Report Preview | "Earth's Most Important Stock" NVIDIA Corporation (NVDA.US) Performance will be released soon! Will the "AI Faith" create another wave?

The AI chip leader NVIDIA Corporation (NVDA.US), the highest market value company in the world and dubbed as the "most important stock on Earth" by Goldman Sachs Group, Inc., will announce its performance for the third quarter of the 2025 fiscal year ending in October on Thursday morning Beijing time, after the US stock market closes on Wednesday. Following a 240% surge in stock price in 2023, NVIDIA Corporation's stock price has nearly tripled since the beginning of this year, driven by the global "AI faith" phenomenon. Global investors are eagerly anticipating NVIDIA Corporation to once again announce unparalleled performance that exceeds market expectations, igniting a renewed faith in artificial intelligence and sparking a global stock market "AI party". Wall Street analysts widely expect that this globally highest market value company is expected to report a continued sharp increase in revenue, thanks to the explosive growth in demand for artificial intelligence (AI) infrastructure by global enterprises and core government departments to expand or build new data centers. Whether it's US tech giants Meta, Microsoft Corporation, Alphabet Inc. Class C, and Amazon.com, Inc. who have reported significant increases in spending on the core artificial intelligence infrastructure, NVIDIA Corporation GPU, or AI application leaders like OpenAI, xAI, Anthropic, and Palantir, or major government departments focusing on "sovereign AI systems" continuing to invest heavily in building AI data centers, the global frenzy in AI deployment shows no signs of waning. According to the latest analyst expectations compiled by Visible Alpha, Wall Street analysts generally expect that this chip giant's total revenue for the third quarter will increase by 84% year-on-year to reach $33.28 billion, and net profit will rise to $17.45 billion, or 70 cents per share, far surpassing the $9.24 billion from the same period last year, which was 37 cents per share. This also means that NVIDIA Corporation will achieve record revenue and net profit for the sixth consecutive quarter. NVIDIA Corporation conducted a 1-for-10 stock split in June, and as of last week's close of the US stock market, NVIDIA Corporation's stock price reached $141.98. Before the performance is released, Wall Street's outlook for NVIDIA Corporation's stock price over the next 12 months is extremely bullish. Among them, the Wall Street banking giant Bank of America Corp recently reiterated its "buy" rating on NVIDIA Corporation and significantly raised its target price from $165 to $190, higher than the general target price on Wall Street. The global trend of increasing data center spending shows no signs of stopping! Giants continue to burn money, is NVIDIA Corporation the biggest winner? According to Visible Alpha's expected data, Wall Street analysts expect that NVIDIA Corporation's data center business total revenue for the third quarter will climb to another historical high of $29.53 billion after reaching a historical high of $26.3 billion in the second quarter. In August, NVIDIA Corporation CEO Jensen Huang stated: "Global data centers are working hard to modernize the entire computing stack through accelerated computing models based on NVIDIA Corporation's AI GPU and increased focus on generative AI." Earlier this week, Wall Street behemoth Morgan Stanley raised NVIDIA Corporation's stock price target for the next 12 months from $150 to $160 and maintained its "overweight" rating, with the core logic being that the growth of the data center business is expected to be stronger. Morgan Stanley's analysis team said: "We expect NVIDIA Corporation's data center business to drive most of the revenue growth in the next five years, as the market's enthusiasm for generative AI creates a very favorable environment for AI/(machine learning) hardware-end parallel compute solutions." Among the seven major tech giants in the US stock market (Magnificent Seven), apart from AI chip leader NVIDIA Corporation(NVDA.US), the other "six giants" have already reported their earnings. Overall, their earnings reports, as well as the earnings reports of "chip manufacturing king" Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, all indicate a "bursting" growth in AI GPU demand, suggesting that NVIDIA Corporation is the biggest winner of this round of US earnings season.Practice computational power demand. With tech giants commenting on increasing capital expenditure on artificial intelligence, Wall Street investment firm D.A. Davidson states that NVIDIA Corporation will continue to thrive and remain one of the biggest beneficiaries of the global AI trend for some time to come. "For example, as long as Microsoft Corporation continues to invest heavily in upgrading its massive data centers, we believe it will continue to transfer shareholder value from Microsoft Corporation to NVIDIA Corporation," the D.A. Davidson research team stated.When it comes to the demand for AI chips in the market, Wei Zhejia, the helm of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, stated at the performance conference that the outlook for AI chip demand is very optimistic, and emphasized that the demand from Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR customers for CoWoS advanced packaging far exceeds the company's supply. "The company will do its best to meet the demand for CoWoS advanced packaging capacity from customers. Even if production capacity doubles this year and continues to double next year, it is still far from enough." The CoWoS S/L/R advanced packaging capacity of Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR is crucial for the broader AI chip capacity such as NVIDIA Corporation's Blackwell AI GPU. According to the latest forecast data from Wall Street financial giant Citigroup, by 2025, the capital expenditures related to data centers of the top four largest tech giants in the United States are expected to increase by at least 40% year-on-year. These huge capital expenditures are largely linked to generative AI, indicating that the computational demand for AI applications such as ChatGPT remains significant. Citigroup stated that this means that the spending scale of the giants on data centers is expected to continue to expand on top of the already robust 2024 spending scale, and the institution expects this trend to provide very significant positive catalysts for AI GPU leader NVIDIA Corporation and data center interconnect (DCI) technology providers. The four major tech giants referred to in Citigroup's research report are global cloud computing giant Amazon.com, Inc., Alphabet Inc. Class C, Microsoft Corporation, and social media Facebook and Instagram's parent company. Citigroup expects in this latest research report that by 2025, the capital expenditures of these four major tech giants on data centers will increase by 40% to 50% year-on-year. The significant increase in capital expenditures by tech giants in data centers is expected to drive the stock prices of data center giants such as NVIDIA Corporation, Arista Networks, and other data center network technology giants that are popular among international investors. UBS Group AG's wealth management department predicts that the annual spending of large tech companies on artificial intelligence will increase by 50% this year, reaching $220 billion, and then increase by another 20% in 2025. "Microsoft Corporation, Alphabet, Amazon.com, Inc., and Meta account for almost half of all AI spending, and their strong balance sheets and investment willingness may continue to support strong growth in AI spending." "Investors should take advantage of recent volatility opportunities to build sufficient exposure to high-quality AI stocks." UBS Group AG stated in a report. Analyst focus: How are Blackwell shipments? Has the heating issue been resolved? Investors will also focus on the latest AI GPU from NVIDIA Corporation - the AI GPU based on the Blackwell architecture. Huang Renxun referred to the Blackwell architecture product as a "complete disruptor in the AI industry." The Blackwell architecture AI GPU made its first appearance in the MLPerf Inference v4.1 benchmark test, impressively demonstrating its outstanding performance in large language model (LLM) inference tasks. Specifically, in the inference task of the open-source large model Llama 2 70B model, the performance of the Blackwell architecture AI GPU per GPU is about 4 times higher than the H100. In addition, there have been reports that the latest generation flagship AI GPU, the AI GPU product based on the Blackwell architecture, has serious overheating issues in high-capacity server racks. These issues have led to design adjustments and project delays, causing major customers like Alphabet Inc. Class C, Meta, and Microsoft Corporation to be concerned about whether they can deploy Blackwell servers as planned. Wall Street analysts will inquire in detail about whether Huang Renxun's Blackwell architecture AI GPU has solved the overheating issue in AI server racks, as well as the shipment outlook for this year and early next year. Recently, analysts from Morgan Stanley warned that some supply-side limitations may bet on the upside potential of NVIDIA Corporation's recent performance outlook, and added, "We believe that a larger upward adjustment will occur later this year." NVIDIA Corporation stated at the last earnings conference that with increased production, it expects to achieve "billions of dollars" in revenue from the Blackwell architecture AI GPUs in the quarter ending in January. Regarding the news of AI server rack overheating, media reports citing sources familiar with the matter revealed that the Blackwell architecture AI GPU is designed for AI and HPC, but has encountered overheating issues in servers configured with 72 processors, with each rack consuming up to 120 kilowatts. The media reports stated that the overheating issues have forced NVIDIA Co.The Corporation has made multiple modifications to the rack design, which not only limits GPU performance but may also damage hardware. Some large customers are concerned that these technical issues may delay the deployment process of processors in the data center.According to media reports, in order to address this difficult issue, NVIDIA Corporation has requested suppliers to adjust rack designs and work with partners to optimize cooling systems. Although this engineering improvement is a routine step in a large-scale technical release, it has further delayed the product delivery time. It is understood that a spokesperson for NVIDIA Corporation responded to this issue by stating that the company is closely collaborating with cloud service providers, and design adjustments are part of the normal R&D process. NVIDIA Corporation hopes that through this collaboration, the final product will meet performance and reliability expectations while accelerating the resolution of technical bottlenecks. The Blackwell architecture AI GPU, which has been carefully refined in collaboration with Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, began small-scale production at the end of October this year for NVIDIA Corporation's core customers to test and configure their respective data centers. It is expected to begin large-scale production and shipping by the end of January next year.