**Nvidia's Expansion with Blackwell Chips Promises Significant Margin Growth**

Jefferies analyst Blayne Curtis has recently added Nvidia to the firm's highest conviction list, highlighting the potential of the company's new Blackwell chips. According to Curtis, the rising demand for Blackwell is expected to substantially improve Nvidia's profit margins.

Presently, Nvidia enjoys gross margins of approximately 61%. However, Jefferies anticipates a remarkable increase, predicting margins could elevate to around 80% as Blackwell production scales up. Achieving such high margins is rare in the hardware industry, which underscores Nvidia's strong pricing capabilities and dominance in the market.

Nvidia has transformed its business model from merely selling individual chips to offering comprehensive AI infrastructure solutions. Customers now include hyperscale datacenters and hedge funds, eager to purchase Nvidia's integrated hardware, software, and systems packages. This shift is expected to further enhance profitability, driven by continuous software licensing and widespread AI workload deployments.