Investing.com -- NVIDIA (NASDAQ:NVDA)'s next-generation Blackwell AI chip is poised for a strong ramp-up, with production revenue in 1Q25 likely to surpass the company's current Hopper chips, according to Morgan Stanley.
The bank's analysts cite supply chain checks that indicate Blackwell chip output could reach 750,000-800,000 units in 1Q25, up nearly threefold from an estimated 250,000-300,000 units in 4Q24.
The production surge is expected to contribute $5-10 billion in revenue for NVIDIA in 4Q24 alone.
Morgan Stanley notes that Blackwell chip demand has been described as "insane" by NVIDIA CEO Jensen Huang in a recent CNBC interview, with customers eager to secure large volumes of the high-performance AI chips.
Huang told the CNBC interviewer that "everybody wants to have the most and everybody wants to be first."
While Hopper volumes, including H200 and H20 chips, are projected to reach 1.5 million units in 4Q24, Morgan Stanley expects these numbers to gradually decline to 1 million units in 1Q25.
However, the bank notes that Blackwell chips command a price premium, with B200 chips priced 60-70% higher than H200, positioning Blackwell revenue to overtake Hopper in the upcoming quarter.
Looking ahead, the report also highlights the development of NVIDIA's GB300 NVL72 server racks, slated for introduction in June 2025, which are expected to boost the company's supply chain and further drive demand for Blackwell chips.
In terms of market implications, Morgan Stanley views the ramp-up of Blackwell as positive for stocks tied to NVIDIA's GPU supply chain, including TSMC, KYEC, and ASE.
The firm notes potential benefits for Aspeed due to higher BMC content, although ongoing specification changes introduce some uncertainty in the ramp-up timing.