What happened
Nvidia's Q3 financial performance is anticipated to reveal a deceleration in revenue growth from previous triple-digit rates, alongside a slight year-on-year decrease in adjusted gross margins. This occurs despite robust demand for its chips, particularly from cloud providers investing heavily in AI data centres. The company's capacity to meet this sustained demand and manage margin pressures will be clarified by the upcoming earnings report, following some major investors reducing their stakes.
Why it matters
The projected deceleration in Nvidia's revenue growth and potential margin compression, amidst high demand, introduces a significant supply chain constraint for organisations dependent on advanced AI processing units. This raises due diligence requirements for procurement and strategic planning teams to re-evaluate component availability, pricing volatility, and potential lead time extensions. It also increases exposure for platform operators and project managers to risks of delayed AI infrastructure deployment and scaling, creating an oversight burden on resource allocation.
