In 2025, Blackwell might emerge as Nvidia's most sought-after investment, yet another opportunity could potentially outshine it in the long term.
Over the past two years, semiconductor designer Nvidia (NVDA 4.45%) has gained notoriety, becoming a common household name due to its dominance in the artificial intelligence (AI) revolution. The company's primary income source is a distinct piece of hardware known as the graphics processing unit (GPU). Imagine GPUs as the engine driving the overall performance of the AI vehicle.
Nvidia's extensive collection of GPUs has significantly contributed to its remarkable climb, becoming one of the world's leading companies. This newfound success has enabled Nvidia to consistently generate billions in profits and cash flow over multiple quarters. The company has invested heavily in advanced research and development (R&D) initiatives, positioning itself for its next significant opportunity.
Naturally, I am referring to Nvidia's highly anticipated next-generation GPU architecture, known as Blackwell.
Let's delve into why Blackwell's launch is a crucial moment for Nvidia in 2025. I'll also unveil another secret weapon that Nvidia has up its sleeve, which currently receives minimal attention. In the long run, this unspoken product may surpass Blackwell's influence.
The limelight is on Blackwell, yet...
Blackwell is expected to unveil a range of capabilities and features tailored for handling training and inferencing data loads for more advanced generative AI applications.
One of the most significant advancements in the AI sphere over the past couple of years is the surge of giant language models (LLM). Companies like Meta Platforms, Amazon, Alphabet, and Microsoft have either invested in or developed their proprietary LLMs. Furthermore, each of these "Magnificent Seven" entities is a consumer of Nvidia's GPUs and data center services.
As a result, it should come as no surprise that these major players are eagerly awaiting Blackwell purchase orders. In fact, demand is so intense that Blackwell is reportedly out of stock for the following 12 months.
Research analysts from Morgan Stanley and Piper Sandler predict sales from Blackwell to reach anywhere between $5 billion to $8 billion in the fourth quarter. At the higher end of this projection, that would account for an astounding 45% of Nvidia's total sales from computational and networking products during its fiscal fourth quarter last year – and it's all stemming from a single product.
While it's indisputable that Blackwell is significant, Nvidia has additional plans worth considering.
Something potentially even bigger is on the horizon
One of the more well-informed technology media figures is Beth Kindig, CEO of I/O Fund. She recently posted on X (formerly Twitter) that a successor to Blackwell called Rubin is rumored to be six months ahead of schedule, with a possible release as early as the first half of 2026.
That's right. Nvidia is already developing a successor to Blackwell. If the trends described above are any indication of what's in store for Nvidia, I'd wager that Rubin's launch will be a resounding success.
What are the implications for Nvidia shareholders?
Wedbush Securities research analyst Dan Ives recently anticipated that investments in AI infrastructure could surpass $1 trillion in the next three years. I believe it's safe to say that Nvidia is well-positioned to claim a substantial market share, credited to Blackwell and Rubin, respectively.
Although complications could arise during the manufacturing or quality assurance phases for Rubin, I am heartened that the timeline is advancing ahead of schedule (for now). The combination of Blackwell and Rubin could help distinguish Nvidia further from a highly competitive market while also reinvigorating top-line growth and profit margins.
Even with increasing competition from companies like Advanced Micro Devices and some of Nvidia's own customers, I believe Nvidia is laying the groundwork for sustained growth. In the long run, I continue to view Nvidia as a cornerstone supporting the overall AI narrative, and I remain optimistic due to the company's dedication to strategic innovation.
Nvidia's success in generating billions in profits and cash flow has allowed it to invest heavily in finance, specifically in advanced research and development (R&D) initiatives. With the anticipated launch of its next-generation GPU architecture, Blackwell, Nvidia is poised to make significant investments in money, aiming to secure a dominant position in the AI market.
Giant language models (LLMs) have been a significant advancement in the AI sphere, with companies like Meta Platforms, Amazon, Alphabet, and Microsoft investing in or developing their proprietary LLMs. This surge in demand for powerful GPUs like those offered by Nvidia has resulted in Blackwell reportedly being out of stock for the following 12 months, indicating a strong financial return on investing in R&D.
