STORY: Stocks swung up and down Thursday after the AI chip giant Nvidia reported another strong quarter, but it didn’t meet some investors’ sky-high expectations.
Nvidia’s revenue outlook is worrying some investors, as it predicts the slowest growth in seven quarters.
He also said that demand for the company’s chips will exceed supply for several quarters in fiscal 2026 due to supply chain constraints.
Analysts say the expected economic slowdown is largely due to (quote) the “law of large numbers.”
This means Nvidia’s incredible growth following the initial AI boom following the launch of ChatGPT in 2022 will result in some tough year-over-year comparisons.
There are still plenty of companies looking to get their hands on Nvidia’s next-generation AI chip, known as Blackwell, but manufacturing the complex chip can take months.
And the design flaws discovered over the summer did not solve the problem.
CEO Jensen Huang told Reuters there are “limits” to how quickly Nvidia can ramp up production, which is expected to weigh on the company’s gross margins.
Still, one portfolio manager who owns Nvidia stock said he has no doubt that demand for the company’s chips remains “absolutely and exceptionally strong” and looks like it will remain that way for the foreseeable future. .
