Nvidia's Blackwell Platform Sees Staggering Demand Amidst Market Optimism

Nvidia's new Blackwell platform is experiencing staggering demand, while its legacy Hopper platform continues to see exceptional demand. The company is working to scale supply to meet this demand, with expectations that Blackwell demand will surpass supply for several quarters into fiscal 2026. Nvidia's quarterly revenue is considered a baseline for its potential rather than a precise measure of product demand.

Wall Street remains optimistic about Nvidia, with numerous analysts raising their price targets despite a slip in earnings reports. Concerns about competition from AMD and Intel persist, but their AI accelerators have not posed a significant threat to Nvidia's market position. AMD's recent earnings report led to a stock decline due to disappointing guidance and planned layoffs, while Intel is undergoing a major restructuring.

Nvidia's data center revenue run rate is now at $120 billion, supported by its CUDA software library, which provides a competitive edge. Some skepticism exists regarding a potential "AI bubble," but Nvidia's diverse demand across various AI applications counters this narrative. CEO Jensen Huang noted ongoing scaling beyond traditional training to post-training and inference.

Nvidia's stock trades at a trailing P/E ratio of 55, higher than the S&P 500, but its rapid growth suggests traditional metrics may not fully capture its value. The company reported an adjusted EPS of $0.81 for the third quarter, with projections indicating a forward P/E ratio of 34. Nvidia has consistently exceeded earnings estimates, suggesting a potential EPS of $4.70 next year, aligning its forward P/E with the broader market.

The company's market cap could reach $4 trillion with a 14% stock gain, a feasible target by year-end. Nvidia's strong performance and leadership in the computing platform sector suggest continued growth and potential for reaching this milestone.