Nvidia has consistently surpassed Wall Street revenue expectations for eight consecutive quarters, but analysts predict slower growth ahead.
The chipmaker, central to the generative AI boom, is expected to report third-quarter sales of $33.13 billion, an 82.8% year-over-year increase.
This marks the slowest growth in six quarters, following five quarters of at least doubling revenue.
Fourth-quarter growth, including sales of Nvidia’s new Blackwell chips, is projected to slow further to 67.6%.
Nvidia is set to release its third-quarter financial results on Wednesday.
Delays caused by design flaws in the Blackwell chip series have raised concerns about Nvidia’s ability to deliver on promises of “several billion dollars in Blackwell revenue” in the January quarter.
Hans Mosesmann, an analyst at Rosenblatt, noted, “It’s all about Blackwell right now from an investor perspective.”
Morgan Stanley predicts Blackwell revenue between $5 billion and $6 billion, while Piper Sandler estimates $5 billion to $8 billion.
Ivana Delevska of Spear Invest is more optimistic, forecasting $12 billion to $13 billion in Blackwell sales during the period.
However, supply chain constraints could limit Nvidia’s production.
TSMC, Nvidia’s contract manufacturer, has warned of tight AI chip production capacity through 2025.
Morgan Stanley analysts cautioned, “A change of even a week in the timeline for delivering Blackwell chips could have a meaningful impact on revenue.”
Nvidia’s results face tough comparisons after the AI investment surge following OpenAI’s ChatGPT launch in late 2022.
Despite narrowing margins, Nvidia has consistently beaten revenue estimates.
With shares nearly tripling this year, the company has surpassed Apple as the world’s most valuable firm.
Nvidia’s GPUs remain in high demand as cloud providers like Microsoft and Amazon continue building AI data centers.
Its proprietary CUDA software, driving over 80% market share in AI chips, has become “a multi-billion-dollar annual recurring revenue business, growing north of 100%,” according to John Belton of Gabelli Funds.