NVIDIA continues to impress. The stock is up +78% TTM, but was down YTD on macro worries. Thankfully, it recovered by +20% in April, bringing it back to +5% YTD. It remains my largest position.
- They continued to reaccelerate in Q4, and guided Q1 to further reacceleration – all without sales to China. And after hitting a record in net new revenue last quarter, they topped it again.
- Gross margin rose back to 75% after its drastic dip during the ramp-up of Blackwell NVL72 racks. FY27 was guided to stay in the mid-70%s.
- FCF margin continued to rebound, and the CFO expects 50% of it to be returned to shareholders going forward.
- Total supply chain commitments rose a massive +89% sequentially, but is of little worry – the upcoming Rubin is again magnifying their supply chain complexity.
- Mgmt is now projecting a vision into $1T in Blackwell & Rubin sales through 2027, increasing their projection from 6 months ago (at GTC DC and Q3 earnings) of $500B through 2026. This previously implied $350B of sales in 2026, and now implies $500B of sales in 2027. And that estimate does not include any of the new rack varieties.
- Agentic AI is now driving a surge in inference demand from the new frontier of enterprise coding tools and personalized AI assistants.
The next year (and likely 2) of sales is visible, so now it's down to the execution of their supply chain and the real-world performance of their next-generation Rubin stack – plus we likely have upside from several new complementary rack forms that enhance inference performance in several directions. In part 2, I'll cover the new chips and rack-level systems announced at CES and GTC, and where they are going with Groq LPUs, BlueField-4, and Vera CPUs.