Attention, Nvidia Shareholders: 1 Crucial Thing to Watch in the Second Half
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The first half was a bit of a roller coaster ride for Nvidia (NVDA -0. 74%) holders. The stock slid almost 30% from the start of the year to early April...
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July 7, 2025
08:10 PM
The Motley Fool
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The first half was a bit of a roller coaster ride for Nvidia (NVDA -0. 74%) holders
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 dered double-digit quarterly revenue growth
The message for future spects is bright too, with Nvidia speaking of soaring demand in the area of AI inference and launching jects abroad such as the building of AI infrastructure in Abu Dhabi
All of this, along with an easing of international trade tensions, mpted investors to return to growth stocks, and one of their top picks has been Nvidia -- the stock 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
Image source: Getty Images
Nvidia's success story Nvidia has built an amazing success story over the years, transforming itself from a company that mainly served the gaming market to one that's at the center of one of today's highest growth industries
The graphic cessing unit (GPU) still is integral to games, but Nvidia -- thanks to sales of GPUs and related ducts and services -- today generates most of its revenue from AI customers
For example, in the 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 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 dered $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 vide a fiftyfold jump in output for reasoning model inference compared to Hopper
A new duct launch Now, the point to watch is this Blackwell Ultra rollout, with special attention to demand and whether the cess 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 mirrors the Blackwell launch, investors may have something to cheer -- and we'll have reason to be optimistic the next chip launches too
Nvidia will have ved its ability to successfully handle frequent chip releases and maintain strong growth and fitability 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 blem or something that could persist through the next duct launches
This is crucial for Nvidia because its market leadership depends on this ability to innovate and successfully roll out a new duct
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 der on mises 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.
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