According to Zhacai Financial APP, CMB International released a research report stating that Nvidia (NVDA.US) third-quarter results for fiscal year 2025 met company guidance and market expectations. Datacenter revenue once again reached a record high, with 90% of datacenter revenue coming from compute-related income ($27.6 billion, a quarter-on-quarter growth of 22.3%), while the remainder came from network-related income ($3.1 billion, a quarter-on-quarter decline of 14.7%). Given the strong demand for the Hopper series and increased production of the Blackwell series, the compute business is the main driver of continued growth for the company. Although network-related business declined quarter-on-quarter this quarter, management expects growth in the fourth quarter. Nvidia delivered 0.013 million GPU samples in the third quarter, and expects fourth-quarter deliveries to exceed previous estimates (the second-quarter guidance was billions of dollars).

CMB International's main points are as follows:

Nvidia (NVDA.US) announced third-quarter results for fiscal year 2025 on November 21, with quarterly revenue of $35.1 billion, a year-on-year increase of 93.6% and a quarter-on-quarter increase of 16.8% (first-quarter and second-quarter quarter-on-quarter growth rates were 17.8%/15.3%). Quarterly revenue exceeded guidance of $32.5 billion by 7.9% and market consensus of $33.3 billion by 5.5%. The non-GAAP gross margin for the third quarter of fiscal year 2025 was 75.0% (a 0.6 percentage point decrease from the previous quarter), in line with company guidance and market expectations. The non-GAAP EPS was $0.81, a year-on-year increase of 101.0%, a quarter-on-quarter increase of 18.4%, exceeding market consensus by 8.9%.

The revenue guidance for the fourth quarter of fiscal year 2025 is $37.5 billion, indicating a quarter-on-quarter growth of 6.9%, slightly above the market consensus of $37.1 billion. Nvidia expects a non-GAAP gross margin of 73.5% for the next quarter, in line with market expectations. The company's performance this quarter was generally in line with market expectations, and there was no significant volatility in the stock price in after-hours trading.

By main business segments, datacenter revenue reached a record high of $30.8 billion (accounting for 88% of third-quarter sales), a year-on-year increase of 112.0% and a quarter-on-quarter increase of 17.1%. Revenue from gaming/professional visualization/autos grew by 13.9%/7.0%/29.8% quarter-on-quarter. Of the datacenter revenue, 90% came from compute-related income ($27.6 billion, quarter-on-quarter growth of 22.3%), while the remainder came from network-related income ($3.1 billion, quarter-on-quarter decline of 14.7%).

CMB International believes that considering the strong demand for the Hopper series and increased production of the Blackwell series, the compute business is the main driver for the company's continuous growth. Despite a quarter-on-quarter decline in network-related business this quarter, management expects growth in the fourth quarter.

The outlook for demand remains optimistic. The demand for the Hopper series is strong, with sales revenue for the H200 in the third quarter reaching billions of dollars. Management stated that Hopper demand will continue to grow in the second half of this year and next year. In addition, the Blackwell series has "fully entered production after successfully completing large-scale corrections." Nvidia delivered 0.013 million GPU samples in the third quarter, and expects fourth-quarter deliveries to exceed previous estimates (the second-quarter guidance was billions of dollars). About half of the company's datacenter revenue in the third quarter came from cloud providers (year-on-year growth of over 2 times), approximately $15 billion. The total capital expenditure for Google, microsoft, and amazon in the quarter was about $50 billion, implying that about 30% of capital expenditures went to Nvidia.

During the initial phase of the Blackwell series ramp-up, gross margin is expected to be under temporary pressure. Management anticipates that the gross margin during this stage will fall within the range of 71.0%-72.5%. Subsequently, as production stabilizes and scales up, the gross margin is expected to improve to around 75% (depending on the company's product mix at that time).

Beneficiaries of the AI industry chain: Management emphasized the complexity of the Blackwell product line, which involves multiple key partners under a global supply chain, such as Taiwan Semiconductor, Amphenol, Vertiv, SK Hynix, Micron, Anker, Nanya Technology, Foxconn, Quanta, Wiwynn, Spil, Dell, HP Inc, AMD, and Lenovo. The outlook for the AI supply chain remains bullish, especially for key beneficiaries with significant contributions from AI revenue.