Nvidia's CEO Says Demand for Its New Chips Is "Insane." Is It Time to Buy the Stock?

Nvidia (NASDAQ: NVDA) has been one of the best performing stocks the past few years, as demand has skyrocketed for its graphics processing units that help build out artificial intelligence (AI) infrastructure.

The company is used to seeing high demand for its products, so it was noteworthy when in a recent CNBC interview, CEO Jensen Huang called demand for chips based on its new Blackwell architecture "insane."

Let's take a closer look at Huang's comments and what it could mean for the stock.

"Insane" Blackwell demand

Blackwell is the newest architecture for Nvidia's graphics processing units (GPUs). The company introduced it earlier this year, saying it was the world's most powerful chip and that it would help customers run their real-time generative AI large language models (LLMs) at much lower cost and energy consumption than its predecessor chips.

Huang told CNBC that after an initial delay due to a minor design flaw that affected manufacturing, Blackwell is in full production and going as planned.

He then explained why the company decided to accelerate the pace of its innovation cycle to once a year, saying that if it can increase performance by two to three times each year, it will increase revenue and decrease costs and energy consumption for its customers each year.

Undoubtedly this will also benefit Nvidia. It will keep it in the lead in a fast-moving technology, while also maintaining high demand and pricing power. The company already announced its next GPU architecture, called Rubin, scheduled for 2026.

At an estimated cost of $30,000 to $40,000 per chip, having "insane" demand for Blackwell bodes very well for the company. When it introduced the technology, it said that a number of leading tech companies were already set to adopt Blackwell, including Alphabet, Amazon, Dell, Meta Platforms, Microsoft, OpenAI, Oracle, Tesla, and xAI. That's a lot of large companies fighting over Nvidia's latest GPUs.

Demand is unlikely to slow

Based on the actions of Nvidia's customers, it does not appear that demand for its GPUs is likely to slow down anytime soon.

For example, Oracle executive chairman Larry Ellison was asked on the company's second-quarter earnings call whether the demand for computing power would slow if there is a transition from AI training to AI inference. He replied that there was likely no end in sight over the next five to 10 years for demand as companies battle for AI technical supremacy. His company, for example, plans to double its own capital expenditures (capex) for fiscal 2025, which ends next May.