Nvidia's 'wow' factor faded

Copyright © HT Digital Streams Limit all rights reserved. ASA Fitch, The Wall Street Journal 3 min Read 09 Sept 2025, 04:01 PM ist Nvidia CEO Jensen Huang. (Lying Photo: Reuters) Summary The AI ​​chip giant used to beat Wall Street expectations for earnings with considerable margin. That track comes to earth. Nvidia shocked the world two years ago in May when it earned earnings that included a $ 11 billion in quarterly turnover, about 53% more than analysts predicted. A straw increasing sales and profits soon followed. But such abrasive quarters are probably not happening again soon. The latest quarter of Nvidia showed the delay. While sales are above the expectations of the analysts, it has been the narrowest partner in the nine quarters since the boom in artificial intelligence has driven the company to unprecedented heights. The shares have dropped about 6% since the results. One reason for the slower growth of Nvidia is obvious: The law of large numbers states that the greater you become, the harder it is to keep getting bigger at the same rate. But there is another, more structural reason why Nvidia’s growth looks less exponential: Restrictions on the supply chain that can cure no financial success. Nvidia’s AI chips are almost all manufactured by Taiwan Semiconductor Manufacturing Co., and are then packed in extensive configurations inserted in increasingly extensive computer systems. Those systems then go to the data centers where AI nomark button takes place. For the past two years, Nvidia has made significant progress in producing more chips and getting them into the systems its customers crave. But this is a complicated dance: there are about 600,000 components in each of the largest AI computer systems of the business, CEO Jensen Huang said in March, and some of its future systems will have 2.5 million parts. At a company conference in June, Huang said that supplies for Nvidia’s current systems are not ‘terribly difficult to get’, as long as the company can predict suppliers what it needs. But there were challenges. “It’s limited, but we’re still growing fairly fast,” he said, adding that it currently takes about a year between when an Nvidia chip starts to make and when an AI super computer sends to a customer. There are other signs that Nvidia is on a more measured trajectory. In the latest quarter of NVIDIA, UBS analysts said their metric of “offer” – the sum of stock items and supply obligations that seek to determine future revenue threats – up to about $ 45 billion in the previous quarter of about $ 41 billion. This analysis “tells us that the offer seems sufficient for revenue to grow revenue, but that the offer does not occur a big ‘hockey’ in turnover, ‘said the analysts. Issues regarding supply chain will soon be worked out. Analysts last month. -hythe, even if Nvidia does a magic for the supply chain, but there is another structural problem over which it has less control: The world’s electricity networks are not growing fast enough to deal with AI computer demand. -Projects develop, because they are not convinced that the AI ​​boom will take long enough to recover large investments that can contribute the costs for other clients. has placed and thus placed less electric grids. There is a good chance that future earnings surprises will be a little less pleasant for investors.