NVIDIA's CEO Jensen Huang announced that design flaws in the company's latest Blackwell AI chips have been corrected with the assistance of long-time partner TSMC. This development addresses previous production delays and boosts optimism about the chip's impact on major clients like Meta, Alphabet, and Microsoft.
The Blackwell AI chips, unveiled in March, had initial design defects that severely hampered production yields, delaying their market release. Huang emphasized that these issues were entirely NVIDIA's fault, leading to the need for redesigns to meet commercial production demands. He dismissed rumors of discord between NVIDIA and TSMC, praising their partnership in resolving these challenges efficiently.
In a recent Goldman Sachs conference, Huang projected that Blackwell chips would begin shipping in the fourth quarter. The anticipation for these chips, amid the broader AI enthusiasm, has propelled NVIDIA's stock (NVDA, Financial) by approximately 190% this year as investors await their next earnings report, slated for November 20.
Wall Street analysts forecast a substantial 83% revenue increase to $33.1 billion for NVIDIA in the third quarter, with earnings per share rising by 84% to $0.74. Analysts also foresee further growth potential for NVIDIA, with Bank of America recently raising its target share price from $165 to $190, citing the burgeoning AI market as a significant growth driver.
Goldman Sachs estimates that Blackwell could generate billions in revenue, serving as a potent driver for both near-term and long-term growth. The bank expects revenue from these chips to hit billions by January and continue growing through April and beyond.
