NVIDIA has taken a big step towards strengthening its domestic chip manufacturing, revealing the first Blackwell wafer made in the US. The hardware company assembled the wafer, which is the base material for NVIDIA’s AI chips, in TSMC’s semiconductor manufacturing facility in Phoenix, Arizona.
NVIDIA revealed its Blackwell platform last year, boasting a goal of revolutionizing the AI industry through tech giants like Amazon, Google, OpenAI and others who already committed to adopting the next-gen architecture. NVIDIA said the latest platform was more powerful and translated to 25x less cost and energy consumption compared to its predecessor. Now that Blackwell wafers can be made at the TSMC plant, NVIDIA can better insulate itself from the ever-evolving tariff situation and geopolitical tensions.
“It’s the very first time in recent American history that the single most important chip is being manufactured here in the United States by the most advanced fab, by TSMC, here in the United States,” Jensen Huang, NVIDIA’s founder and CEO, said at the celebration event.
With NVIDIA’s Blackwell architecture ready for the volume production stage, the company is still working on expanding its manufacturing footprint across the US. Earlier this year, NVIDIA said it had plans to funnel half a trillion dollars towards building AI infrastructure in the US through partnerships with TSMC, Foxconn and other companies.
As incredible a year as 2024 has been for Artificial Intelligence (AI) stocks, it’s entirely possible that 2025 could be even better. There is still a lot of momentum and plenty of positive catalysts are on the horizon that can spur more growth. This is a market that most major players believe will be massive. Analysis from Statista puts the market at $826 billion by 2030.
So, as we approach the end of the year, what companies are poised to see serious growth? While I don’t have a crystal ball, here are my top two picks.
Yes, Nvidia (NASDAQ: NVDA) still has room to run. The semiconductor giant is gearing up for another big year driven primarily by sales of the soon-to-be-released “Blackwell” architecture, the newest iteration of its flagship AI-powering chips.
A lot will be revealed in the company’s upcoming earnings next month and the guidance the company sets, but it seems that 2025 could see a significant jump in revenue as demand continues to be sky-high for its current “Hopper” chips despite Blackwell’s imminent release. The reported 12-month-long backlog for Blackwell orders should keep it so. Elon Musk, for instance, recently purchased 100,000 H100s — there is more than one version of each iteration of chip architecture — and plans on purchasing another 50,000 H200s soon.
Nvidia’s competitors are struggling to keep pace and I don’t see them materially eating into Nvidia’s market share in 2025. AMD is set to release its next-generation AI chip around the same time Blackwell finally ships. Here’s the catch: It will be a direct competitor of the H200, not the (Blackwell) B200. AMD is a full cycle behind at this point. This will likely narrow, but Nvidia has a lot of cash to fuel its pace of innovation that AMD can’t match. Last quarter, despite playing catch up, it spent about half of what Nvidia spent on research and development.
Take a look at this chart, which shows the massive amount of free cash flow (FCF) Nvidia has at its disposal to maintain its edge. Of course, money isn’t everything, but it sure helps.
NVDA Free Cash Flow Chart
Meta(NASDAQ: META) has received a lot of flack in recent years because of Mark Zuckerberg’s insistence that the metaverse is going to be the next big thing. It doesn’t seem like he’s right about this one — the company’s metaverse division, Reality Labs, posted a $4.5 billion loss last quarter.
But I don’t think this is quite the folly that many do; the metaverse still could be big. The reason I bring this up, though, is that it shows Meta isn’t afraid to take risks and bet big. Zuckerberg is applying the same attitude to AI, investing heavily in building out its Meta AI and eventually incorporating that technology into the work Reality Labs does.
The fact is, whether Reality Labs pays off or not, the company is still extremely profitable, seeing strong user and revenue growth across its bevy of social media platforms — the company makes its money by selling targeted ads on its platforms, something AI could make more efficient. It’s also one of the cheapest stocks in big tech. Of the major players, only Alphabet has a lower price-to-earnings ratio (P/E). I think that makes Meta an extremely attractive pick, regardless of what happens with Reality Labs.
However, Meta has the chance to marry AI and the metaverse, something that, if done well, could be a game changer for the company. To be clear, this is conjecture, but its possible that 2025 will see the company release a demo of something in this vein.
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“Blackwell is in full production, Blackwell is as planned, and the demand for Blackwell is insane,” Huang told CNBC on Thursday. “Everybody wants to have the most, and everybody wants to be first.”
Nvidia first announced Blackwell in March and stated that it was the most powerful AI chip in the world with advanced security capabilities, better performance, and more memory. The biggest names in AI, including OpenAI, Microsoft, Meta, Amazon, and Google, will use Blackwell to power their AI efforts.
Nvidia CEO Jensen Huang displays the new Blackwell GPU chip, left, and the Hopper GPU chip, right, in March 2024. Photographer: David Paul Morris/Bloomberg via Getty Images
“There is currently nothing better than NVIDIA hardware for AI,” Tesla and xAI CEO Elon Musk stated, at the time.
Since the initial announcement, Blackwell has hit a few snags in production, leading to delays. Nvidia CFO Colette Kress said in late August that the company has fixed the issue and expects to ship “several billion dollars” worth of the chip in the fourth quarter of 2024.
Huang said that Nvidia has updated its platform significantly with Blackwell, and intends to continue updating it. Nvidia has increased performance by two to three times from its 2022 Hopper chip to its Blackwell chip, which Huang says increases revenue for Nvidia’s customers by two to three times.
“What we’re looking at now is the beginning of the next wave of AI, the biggest wave of AI,” Huang told CNBC. “This is really about companies around the world using AI to be more productive as their digital employees and AI agents and co-pilots and however people describe them, as well as using AI, generative AI, to revolutionize the way they build their products and the products they build.”
