Every Investor in Nvidia Should Maintain Vigilance Over This Figure
It's no secret that Nvidia Corporation (NVDA) has skyrocketed during the ongoing AI revolution, leaving its customers craving its GPUs. This has significantly boosted revenue in Nvidia's data center division. In its Q2 of fiscal 2025, which ended on July 28, total revenue soared by over 100% compared to the previous year, reaching a whopping $30 billion. An impressive 88% of these sales stemmed from its data center group.
Given this trend, it's only logical to anticipate that this crucial segment will continue to fuel the stock's performance in the immediate future. However, the big question is whether Nvidia's shares have more potential for growth following an impressive 187% increase so far this year. A key indicator that might offer some insight is one specific figure.
Nvidia's expansion has been exponential
The company has been struggling to meet demand for its H100 and H200 GPU chips. Fortunately, their next-generation Blackwell chips are now being produced with sales starting to pick up. Nvidia's CEO, Jensen Huang, has expressed widespread enthusiasm for Blackwell, dubbing the anticipation for it as "incredible."
Huang has also mentioned that the company aims to introduce new technology annually. Notably, the company has already disclosed that a device called Rubin is scheduled for release in 2026.
Investors will get a glimpse of how Blackwell affects sales during the Q3 of fiscal 2025 report, slated for release on November 20. One crucial metric to monitor is Nvidia's data center segment's quarterly sales growth. This is noteworthy because growth has actually deteriorated over the past five quarterly periods compared to the preceding quarter.
For the stock to maintain its incredible momentum, this sequential revenue growth should reverse this pattern. At the very least, investors would like to see the declining growth rate stabilize. With Blackwell, a cutting-edge AI accelerator, this reversal could be within reach. That's because Nvidia's shares have already surged in anticipation of sustained growth. Investors should watch this figure closely to determine if the gains can be sustained.
In light of Nvidia's anticipated Q3 fiscal 2025 report, investors will be keen to observe the company's data center segment's quarterly sales growth, as it has been decreasing sequentially over the past five quarters. To maintain its current momentum, this trend needs to reverse or at least stabilize, considering Nvidia's shares have already soared due to expected sustained growth.
As Nvidia's demand for H100 and H200 GPU chips continues to outpace supply, and the Blackwell chips are now in production with sales picking up, finance-savvy individuals might consider investing more money in Nvidia, taking advantage of its potential for further growth following its impressive performance this year.
