Nvidia GTC in DC Blackwell expectations increase

Nvidia GTC in DC

Speaking to a packed arena, NVIDIA Corp. (NASDAQ: NVDA) CEO, Jensen Huang, delivered his keynote. It covered a wide range of topics, highlighting the magnitude of the AI impact. In addition, he announced a slew of significant partnerships, which seemed to cement Nvidia’s criticality in the AI ecosystem. Overall, Huang’s keynote at GTC emphasized American innovation with the goal of making the economy more productive and driving growth. He explained that compute is the key to the success of applications at the top of the stack, due to the current high cost to understand and process context. According to Huang, Grace Blackwell is significantly higher performing and lower cost.

GTC and the outlook for Q3 and beyond

For fiscal Q3 2026, Nvidia guided in line with expectations of ~$54.5 billion in total revenue and noted that the outlook does not include any revenue from H20 in China. This outlook disappointed the market in Q2, as some analysts were expecting Q3 guidance to be over $56 billion. CEO Huang made a point of noting the importance of hosting GTC in Washington DC. He noted that the current administration was expected to attend but instead went to Asia to try to move the trade talks forward. The China business may turn a corner if trade negotiations are supportive.

Huang emphasized the strong visibility in the Blackwell demand. He called out that Nvidia has $500 billion of cumulative demand for Blackwell and Rubin through 2026. Analysts are projecting the Data Center segment to make up $49.1 billion, up from $47.7 billion in late May. However, as Blackwell ramps, gross margin is expected to moderate year-over-year to the mid-70s in the Q3. Management explained that “to support the ramp of Blackwell and Blackwell Ultra, inventory increased sequentially from $11 billion to $15 billion in Q2”. When Blackwell is fully ramped, the Company expects gross margin to be in the mid-70s later in the year, suggesting it may not tick back to the high-70s till FY 2027 or later. In addition, there continue to be questions about the timing of Blackwell’s trajectory and how that will be reflected in the quarters.

At GTC, Huang focused on the demand in his keynote. However, consensus expects the Data Center gross margins for FY 2026 to be 74.0% and 76.3% next year, below the 78% of FY 2024 and FY 2025. Sentiment has become slightly more conservative on the magnitude of the earnings impact from Blackwell this year and next year. There continues to be debate among analysts about the B-series and GB-series ramps and how much the long-term expected growth is projected to add to revenues and earnings in FY 2027 and beyond. Given the visibility of demand, it will be important to hear how Management guides for Q4. For FY 2027, Blackwell expectations have more than doubled since late May, increasing from $49 billion to now $102 billion.

According to Visible Alpha consensus, Data Center revenues for FY 2027 are now expected to be $264.9 billion, up from $252.4 billion in August, driven by the strength of Blackwell. Consensus EPS is projected to be $6.65/share, up from $6.38/share last quarter, on Blackwell revenues ramping and Data Center gross margin moving up 230bps to 76.3% from this year’s 74.0%. The current consensus target price is $228/share and puts the market cap at over $5 trillion, an implied return of 13% from current levels.

 This article was published by Visible Alpha, part of S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.