On Wednesday, Nvidia Corporation (NASDAQ:NVDA) CEO Jensen Huang defended the company's dominant AI GPU platform, saying its full-stack architecture, ecosystem reach and performance-per-watt leadership make it irreplaceable, even as rivals Broadcom Inc. (NASDAQ:AVGO) and Marvell Technology Inc. (NASDAQ:MRV) ramp up custom AI chip production to challenge its market position.
Nvidia CEO Explains Why GPUs Still Lead
Speaking on Nvidia's fiscal second-quarter earnings call, Huang dismissed concerns that hyperscalers' investments in application-specific integrated circuits could erode Nvidia's lead in AI compute.
"Accelerated computing is unlike general-purpose computing. It's a full-stack co-design problem," Huang said, highlighting the complexity of AI data centers and Nvidia's advantage in providing an end-to-end platform—from data processing to inference.
Huang also noted that Nvidia's GPUs are supported in every cloud and computer company and are built to handle evolving AI model architectures, including multimodal systems.
"So when you build a data center with Nvidia platform in it, the utility of it is best. The lifetime usefulness is much, much longer," he added.
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ASIC Arms Race Gains Momentum
Broadcom and Marvell are leading a surge in demand for custom AI accelerators, with the ASIC market forecasted to hit $30 billion in 2025, growing 30% annually.
Broadcom, with a 55%-60% share, is powering Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google's TPU v8 and Meta Platforms, Inc.'s (NASDAQ:META) MTIA chips and is expected to generate $31 billion in AI revenue next fiscal year, a 60% jump.
Marvell, holding 15% market share, has won designs for Amazon.com, Inc.'s (NASDAQ:AMZN) Tranium 2 and Microsoft Corporation's (NASDAQ:MSFT) next-gen chips, but its stock is down 41% year-to-date.
Nvidia Stresses Ecosystem, Efficiency Advantage
Huang said Nvidia's performance-per-watt efficiency is unmatched, making it a top choice for data centers constrained by power costs. "Perf per watt drives directly to revenues," he said.
He also highlighted Nvidia's ecosystem, spanning CPUs, GPUs, SuperNICs, NVLink interconnects, Spectrum-X Ethernet switches and its newly unveiled Spectrum-XGS, designed for "AI super factories" with multi-gigawatt compute capacity.
Nvidia's Q2 Earnings And Guidance
Nvidia reported second-quarter revenue of $46.74 billion, up 56% year-over-year, beating Wall Street's $46.02 billion estimate. Adjusted EPS came in at $1.05, and gross margins hit 72.7%.
For the next quarter, Nvidia guided revenue between $52.92 billion and $55.08 billion, slightly above the Street's forecast, excluding any H20 chip sales to China.
Price Action: Nvidia shares fell 3.14% in after-hours trading following the earnings, according to Benzinga Pro.
Benzinga’s Edge Stock Rankings indicate NVDA continues to show a strong upward trend across short, medium and long-term periods, with further performance insights available here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
