Today’s News

Nvidia’s (NVDA.O) latest revenue growth forecast marks its slowest in seven quarters, falling short of the lofty expectations set by investors captivated by the AI chipmaker’s rise as the world’s most valuable semiconductor firm.

The Santa Clara-based company’s shares dipped 5% following the results but rebounded slightly to close 2.5% lower in after-hours trading. During the regular session, shares were down 0.8%. Despite this, Nvidia’s stock has nearly quadrupled in value this year and has increased over ninefold in the past two years, reaching a market cap of USD 3.6 trillion. 

Blackwell Chip Line Gains Momentum 

Nvidia recently launched its Blackwell family of AI chips, which initially impacted gross margins but are expected to improve over time. CFO Colette Kress noted the company is poised to exceed its initial fourth-quarter sales forecast for the new processors, reflecting robust demand. 

Addressing reports of overheating in flagship liquid-cooled servers featuring 72 Blackwell chips, CEO Jensen Huang assured analysts, “There are no issues with our Grace Blackwell liquid-cooled systems.” He added, “The engineering is not easy at all… but we’re in good shape.” 

Nvidia’s Growth Slows But Demand Remains Robust 

For the fourth quarter, Nvidia projected revenue of USD 37.5 billion, plus or minus 2%, narrowly surpassing analysts’ estimates of USD 37.09 billion, according to LSEG. While this represents a remarkable 69.5% year-over-year growth, it is a slowdown from the 94% growth recorded in the third quarter. 

“Investors have become accustomed to huge beats from this company, but doing that is getting harder and harder,” said Ryan Detrick, chief market strategist at Carson Group. 

The company attributed some of the revenue growth slowdown to supply chain constraints, including limited production capacity at its manufacturing partner, TSMC (2330.TW). Huang noted, “As we ramp [Blackwell] up, we’ll keep increasing more production lines, improving our yield, and improving our cycle time.” 

Key Earnings and Segment Growth 

Nvidia reported third-quarter adjusted earnings of 81 cents per share, exceeding Wall Street’s estimate of 75 cents. The company’s data center segment, which contributes the majority of its revenue, grew 112% to USD 30.77 billion during the quarter, though this marked a decline from the 154% growth seen in the prior quarter. 

Adjusted gross margins stood at 75%, reflecting the costs associated with launching the Blackwell chips. 

Nvidia’s AI chips remain in high demand, especially among cloud providers expanding their data centers to support the intensive processing needs of generative AI technologies. However, supply chain challenges and slowing growth have added pressure to Nvidia’s otherwise stellar performance. 

With AI demand still booming, the company’s outlook remains promising, though meeting elevated investor expectations may prove increasingly challenging. 

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