NVIDIA's earnings report exceeds expectations, Computing Power demand remains strong

NVIDIA's latest financial report shows that the company's performance far exceeded expectations, maintaining rapid growth. The first quarter of fiscal year 2025, corresponding to the first quarter of the calendar year 2024, saw NVIDIA's quarterly revenue reach $26 billion, a year-on-year increase of 262%, far exceeding the previous guidance of $24 billion. Among them, the data center business revenue was $22.6 billion, a year-on-year increase of 427%, showing strong growth. The net profit was $14.88 billion, a year-on-year increase of 628%.

There are several highlights worth noting in the financial report:

1. The Blackwell platform is about to be put into production. NVIDIA expects its next-generation Blackwell products to be delivered in the second quarter of fiscal year 2025, gradually increasing volume in the third quarter, resulting in considerable revenue for the year. The demand for H200 and Blackwell chips is expected to remain strong until 2025.

2. Network demand remains strong. Network revenue in data center income reached $3.2 billion, a year-on-year increase of 242%. With the continuous deployment of H200 and the delivery of Blackwell, the demand for 800G and 1.6T network-related products is expected to remain robust.

3. Intergenerational replacement will not affect current demand. Customer procurement is usually planned in advance, and different generational products cannot be mixed in networking. It is expected that H200 and B series products will continue to increase in volume.

4. Computing Power valuation may shift towards 2025. With NVIDIA's performance exceeding expectations, the market's recognition of Computing Power has further increased. After the upgrade of the B series products, the market has begun to focus on the second half of the year and even the prospects for 2025, and the valuation is expected to gradually shift towards 2025.

Overall, Nvidia's performance continues to exceed expectations, indicating that the demand for Computing Power is still in a phase of rapid growth. This brings opportunities to related industrial chains, including optical communication, data center equipment, and cloud computing. Current key focus can be on core Computing Power targets such as Zhongji Xuchuang, New Era Technology, Tianfu Communication, Industrial Fulian, and Huadian Co., Ltd. As the valuation switches for core targets, other Computing Power related varieties are also expected to receive more attention.