EARNINGS $POTLIGHT
Nvidia Earnings
May 26, 2025
Nvidia's upcoming earnings call on May 28th AMC will be a critical event for the company and the broader tech market.
High Expectations Amidst AI Boom: Nvidia is projected to report significant year-over-year growth in revenue and earnings per share, largely driven by the insatiable demand for its GPUs in AI data centers. Analysts are closely watching data center sales, which are the primary engine of this growth with major cloud providers like Microsoft, Amazon, and Google being key customers for their Hopper and upcoming Blackwell platforms.
Trump's Policy Brouhaha and China Impact: The political climate surrounding U.S.-China chip exports is a major overhang. While the Biden administration had implemented strict export controls, recent reports suggest the Trump administration is considering a different approach potentially repealing some Biden-era "AI diffusion rules" that were set to take effect. However, this doesn't necessarily mean a complete loosening of restrictions as Trump is expected to craft his own set of controls which could still be quite stringent.
Nvidia has been significantly impacted by these restrictions, with CEO Jensen Huang openly calling the U.S. chip policy a "failure" as it has pushed Chinese companies to develop their own alternatives. Nvidia's market share in China has reportedly dropped from 95% before 2022 to around 50% currently with Huawei's Ascend chips becoming a strong competitor. Nvidia has already had to write off $5.5 billion in inventory due to these restrictions and forfeited an estimated $15 billion in sales.
New Blackwell Chip for China: In response to the export controls, Nvidia is reportedly planning to release a cheaper, downgraded version of its Blackwell AI chip specifically for the Chinese market. This chip is designed to comply with U.S. export restrictions by featuring simpler specifications, such as using conventional GDDR7 memory instead of advanced high-bandwidth memory (HBM) and not requiring TSMC's advanced CoWoS packaging technology. Mass production for this China-specific Blackwell variant is anticipated to begin as early as June 2025, with another Blackwell-architecture chip for China potentially starting production in September. This move highlights Nvidia's ongoing efforts to retain a presence in the crucial Chinese market while navigating the complex regulatory landscape.
Key things to watch in the earnings call:
Blackwell Ramp-up: Investors will be keen for updates on the production and deployment of the next-generation Blackwell chips, as strong demand for these is expected to offset some of the China-related headwinds.
China Strategy Commentary: Any clarity or further details on Nvidia's strategy for the Chinese market, particularly regarding the new China-specific Blackwell chips and how they anticipate navigating evolving export controls.
Guidance: Nvidia's forward guidance for the upcoming quarters will be crucial, as it will provide insights into the company's outlook on overall demand particularly in the data center segment and how it factors in the ongoing geopolitical complexities.
Nvidia's earnings call will be a delicate balancing act with investors closely scrutinizing how the company addresses the challenges and opportunities presented by U.S.-China trade policies and its plans for the highly contested Chinese market.
-
Name: Micron Technologies
-
Ticker: MU
-
Earnings: March 20th AMC
-
Consensus EPS: $1.28
-
Humble Beginnings:
-
Micron was founded in Boise, Idaho, in 1978, initially as a semiconductor design consulting company.
-
Early funding came from local Idaho businessmen, and notably, from J.R. Simplot, the "potato king," whose company supplied potatoes to McDonald's. This connection led to McDonald's also investing in Micron.
-
They began their operations from the basement of a dentists office.
From Consulting to Manufacturing:
-
They shifted from consulting to manufacturing, producing 64K DRAM chips in 1981.
Pioneering Technology:
-
Micron has been at the forefront of memory technology, contributing to advancements like atomic layer deposition high-k films for DRAM.
Broad Impact:
-
Micron's memory and storage solutions are essential components in a wide range of devices, from personal computers and smartphones to data centers and automotive systems.
FUN FACTS
Founded in a Denny's: The idea for Nvidia was reportedly hatched by its three co-founders – Jensen Huang (current CEO), Chris Malachowsky and Curtis Priem – over coffee at a Denny's in San Jose, California in 1993.
The GPU Pioneer: Nvidia coined the term "Graphics Processing Unit (GPU)" in 1999 with the release of its GeForce 256. This marked a significant shift in how graphics cards were designed and paved the way for modern computer graphics.
Near Bankruptcy to Trillion-Dollar Company: Nvidia's first chip, the NV1 released in 1995 was a $10 million failure and led to the company laying off half its employees. However, they persevered and achieved their first major success with the RIVA 128 a couple of years later selling a million chips in four months. Fast forward to 2023-2024 and Nvidia became the first semiconductor company to hit a $1 trillion market capitalization and its value has since soared past $3 trillion.
CEO's Tattoo: Jensen Huang got a tattoo of the company's logo when the stock first hit $100 per share.
Dominant Market Share: As of 2023, Nvidia holds approximately 80% of the global market share in discrete desktop GPU semiconductor chips.
CUDA Platform: Nvidia's Compute Unified Device Architecture (CUDA), released in 2006, opened up the parallel processing capabilities of GPUs to scientists and researchers, significantly contributing to breakthroughs in AI and scientific computing.
Family Ties in the Chip World: Lisa Su, the CEO of AMD (one of Nvidia's main competitors), is his first cousin.
-