The first half was a bit of a roller coaster ride for Nvidia (NVDA -0.74%) shareholders. The stock slid almost 30% from the start of the year to early April amid a variety of concerns — from the future of artificial intelligence (AI) spending to worries that President Trump’s import tariffs would weigh on the economy and corporate earnings.
Meanwhile, the company continued to launch its new Blackwell platform and delivered double-digit quarterly revenue growth. The message for future prospects is bright too, with Nvidia speaking of soaring demand in the area of AI inference and launching projects abroad such as the building of AI infrastructure in Abu Dhabi. All of this, along with an easing of international trade tensions, prompted investors to return to growth stocks, and one of their top picks has been Nvidia — the stock finished the first half with a 17% gain.
Now, as we head into the second half of the year, you may be wondering how Nvidia will fare — here’s one crucial element to watch.
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Nvidia’s success story
Nvidia has built an amazing success story over the years, transforming itself from a company that mainly served the video gaming market to one that’s at the center of one of today’s highest growth industries. The graphic processing unit (GPU) still is integral to video games, but Nvidia — thanks to sales of GPUs and related products and services — today generates most of its revenue from AI customers. For example, in the latest quarter, data center revenue made up 88% of total revenue.
This AI giant entered the AI market in its earliest days and aggressively built an empire. Today, selling the world’s top-performing GPUs, Nvidia dominates the AI chip market and has pledged to update its chips — and often complete architecture — on an annual basis. It launched this annual rhythm with the Blackwell architecture and chip in the fourth quarter of last year — the rollout went smoothly, Nvidia maintained gross margin in its forecast range, and Blackwell delivered $11 billion in revenue during its first quarter of commercialization.
That represented a successful start to this fast-paced innovation plan, and this brings me to the point to watch now — a new milestone for Nvidia — as the second half begins. Nvidia’s next launch is Blackwell Ultra, and it’s already started as cloud player CoreWeave just announced the availability of the platform. CoreWeave now is offering customers access to GB300 NVL72, a system that’s a step up from the original Blackwell and a leap from the Hopper architecture — that was the main Nvidia architecture in use before the original Blackwell launch this winter. GB300 NVL72 may provide a fiftyfold jump in output for reasoning model inference compared to Hopper.
A new product launch
Now, the point to watch is this Blackwell Ultra rollout, with special attention to demand and whether the process is smooth or not. And once earnings season rolls around, it will be important to look at sales figures as well as gross margin. If this latest update mirrors the Blackwell launch, investors may have something to cheer about — and we’ll have reason to be optimistic about the next chip launches too.
Nvidia will have proved its ability to successfully handle frequent chip releases and maintain strong growth and profitability on sales. If there’s a glitch along the way or if Nvidia misses a financial goal, then it will be important to dig deeper and examine whether this was just a one-time problem or something that could persist through the next product launches.
This is crucial for Nvidia because its market leadership depends on this ability to innovate and successfully roll out a new product. Demand for Blackwell this winter, with it exceeding supply at certain moments, shows us customers are eager to get their hands on the next Nvidia innovation. That’s positive, but Nvidia must smoothly deliver on promises in order to keep this momentum going. So far, with the Blackwell launch as a reference point, there’s reason to be optimistic.
And if Nvidia scores a win with the Blackwell Ultra launch too, the company could see its stock continue to march higher in the second half.
Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
