Nvidia has reported eight consecutive quarters of revenue growth that surpassed Wall Street expectations. However, as the company prepares to launch its latest AI chips, analysts are cautious about slowing growth and supply chain issues.
The chipmaker’s third-quarter sales surged 82.8% to $33.13 billion, marking the slowest growth in six quarters. Sales for the fourth quarter ending January are expected to drop further to 67.6%, with revenue from Nvidia’s new Blackwell chips likely between $5 billion and $8 billion.
Nvidia’s ability to deliver on promised revenue will be crucial, as supply chain constraints may limit production capacity. Analysts at Morgan Stanley expect a significant impact on revenue if the timeline for delivering Blackwell chips shifts by just one week.
Despite challenges, demand for Nvidia’s GPUs is expected to remain robust in the foreseeable future. Cloud service providers like Microsoft and Amazon are investing billions of dollars in AI data centers that use Nvidia’s chips. The company’s proprietary CUDA software framework has helped it dominate the AI chip market, with an 80% market share.
Analysts at Rosenblatt and Gabelli Funds believe Nvidia’s growth prospects depend on the success of its Blackwell chips. Their estimates range from $5 billion to $13 billion in revenue for the fourth quarter. Nvidia’s quarterly results will drive or weaken a prolonged rally in AI-linked stocks, with the company’s shares nearly tripling this year.
Source: https://money.usnews.com/investing/news/articles/2024-11-18/nvidias-blackwell-revenue-in-focus-as-sales-growth-slows