Nvidia – Silicon Supreme

Nvidia – Silicon Supreme

Nvidia, the graphics processing unit (GPU) designer, had another standout quarter. Since the beginning of the year, Nvidia’s share price has increased by over 120%. Big tech companies such as Amazon, Microsoft, Alphabet, and Meta are buying Nvidia’s chips for their data centers so that they can enhance their artificial intelligence capabilities. Companies and researchers are then able to train and run their large language models from these data centers. To get an idea on how these big some of these AI investments have been, Meta (owners of Facebook, Instagram and WhatsApp) top of acquired 24 thousand H100 GPU chips, which go for between $25000 and $40000 each, to power their Lambda AI service.

Nvidia released their Q1 2025 results last week. Revenue for the quarter was $26 billion, up 262% compared to the same quarter last year. Net income for Nvidia was $14.9 billion, up 628%. Data center revenue, which includes the revenue recognized from the sale of chips for artificial intelligence, was $22.6 billion, up 427% year on year. Nvidia’s gross margin was 78.4% and its net margin 57.1%.

The H100 platform is currently the top-of-the-line chip platform in the market. However, Nvidia has developed a new platform, Blackwell, expected to be released later this year. The Blackwell platform performs 4x faster in training LLM models and 30x faster in inferencing (where the trained LLMs draw conclusions from new inputs) compared to the H100 platform. Nvidia faces the risk of overdeveloping their chips, where customers may wait out certain generations of chips to get the next generation, which is significantly better. Nvidia, however, is confident that current demand far outstrips current supply for both the H100 and Blackwell chips.

Nvidia developed the CUDA software platform to expand the use of its chips in various applications, including AI. However, CUDA is exclusive to Nvidia’s chips. Due to the heavy reliance on Nvidia’s chips, their limited supply, and high costs, other developers have created an open software platform called Triton. This platform allows developers to run AI applications on an array of other chips.

Nvidia also faces significant competition in the chip design field. They are not only competing with established designers like AMD, but also with well-capitalized companies such as Amazon and Microsoft, who are developing their own chips to reduce their reliance on Nvidia. Nvidia has stated that their chip cycle is one year between each generation, so competing companies are aiming at a moving target going at breakneck speed.

Nvidia, Amazon, and Microsoft are held in the Lunar BCI Worldwide Flexible Fund and by Lunar Capital’s Offshore Portfolio Clients.

Key Indicators
Index / Fund / Rate
Start of Year
Last Week
This Week
% Change YTD
Index / Fund / Rate
Start of Year
188.33
Last Week
204.58
This Week
207.00
% Change YTD
9.91% Lunar Capital increasesymbol
Index / Fund / Rate
JSE ALSI
Start of Year
76 893
Last Week
79 531
This Week
79 112 Lunar Capital increasesymbol
% Change YTD
2.89% Lunar Capital increasesymbol
Index / Fund / Rate
NASDAQ Composite
Start of Year
15 011
Last Week
16 686
This Week
16 921 Lunar Capital increasesymbol
% Change YTD
12.72% Lunar Capital increasesymbol
Index / Fund / Rate
S&P 500
Start of Year
4 770
Last Week
5 303
This Week
5 305 Lunar Capital increasesymbol
% Change YTD
11.21% Lunar Capital increasesymbol
Index / Fund / Rate
Prime Lending Rate
Start of Year
11.75%
Last Week
11.75%
This Week
11.75%
% Change YTD
0.00%
Index / Fund / Rate
USD/ZAR
Start of Year
18.30
Last Week
18.17
This Week
18.41 Lunar Capital increasesymbol
% Change YTD
0.60% Lunar Capital increasesymbol
Index / Fund / Rate
EUR/ZAR
Start of Year
20.17
Last Week
19.78
This Week
19.96 Lunar Capital increasesymbol
% Change YTD
-1.04% Lunar Capital stocktake arrow down
Index / Fund / Rate
Brent Crude ($'barrel)
Start of Year
76.97
Last Week
83.93
This Week
82.16 Lunar Capital stocktake arrow down
% Change YTD
6.74% Lunar Capital increasesymbol
Source: Iress

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Disclosures
Lunar Capital (Pty) Ltd is a registered Financial Services Provider. FSP (46567)
Read our full Disclosure statement: https://lunarcapital.co.za/disclosures/
Our Privacy Notice: https://lunarcapital.co.za/privacy-policy/
The Lunar BCI Worldwide Flexible Fund Fact Sheet  can be read here.
This stocktake is prepared for the clients of Lunar Capital (Pty) Ltd. This stocktake does not constitute financial advice and is generated for information purposes only.

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