NVIDIA Q3FY25 Growth Story Still On Track But Heed The Flaws In Jensen's GenAI Vision

not every workload needs or runs better on a GPU...

In what has now become the most eagerly anticipated event in the earnings calendar, NVIDIA this week reported Q3FY25 revenues of $35.082 billion, up 17% QoQ, up 94% YoY and a full $2.5 billion above the guided midpoint. GAAP gross margin was 74.6 %, in line with guidance and essentially flat both QoQ and YoY.

Looking ahead, NVIDIA is forecasting revenues of $37.5 billion, up ~7% sequentially. Gross margins to decline slightly to 73%.

The lion’s share of the prepared remarks, now the responsibility of CFO Colette Kress to deliver, was dedicated to their data centre performance, and rightly so since it completely dwarfs all of their other segments:

Data Center revenue was a record, up 112% from a year ago and up 17% sequentially. The strong year-on-year and sequential growth was driven by demand for our Hopper computing platform for training and inferencing of large language models, recommendation engines, and generative AI applications.

Breaking out the data centre into its component compute and networking segments, we got the following details:

Data Center compute revenue was $27.6 billion, up 132% from a year ago and up 22% sequentially. Networking revenue was $3.1 billion, up 20% from a year ago driven by Ethernet for AI, which includes SpectrumX end-to-end ethernet platform.

The Blackwell issue was briefly mentioned, and it came up again during Q&A, we shall get back to this anon..

We completed a successful mask change for Blackwell, our next Data Center architecture, that improved production yields.

Finally, we learned that supply chain constraints exist for both Hopper and Blackwell, and that demand for the latter will exceed supply well into the coming year.

Both Hopper and Blackwell systems have certain supply constraints, and the demand for Blackwell is expected to exceed supply for several quarters in fiscal 2026.

As is his wont, CEO Jensen Huang waxed long and lyrical during the Q&A session. We got his take on the Blackwell overheating rumours, his vision for the future of generative AI and how it’s going to reshape computing as we know it today. Although compelling, his vision is seriously flawed. Let’s dig in…