Blackwell: Nvidia’s great hope or a new risk for shareholders?

Nvidia is a leader in the artificial intelligence (AI) industry, but it faces several challenges. While the company maintains strong leadership, product issues, high expectations, and threats from China could complicate its growth. Nvidia is on track to surpass $100 billion in annual sales for the first time in its history, with sales more than doubling compared to last year. The company’s market capitalization is $3.6 trillion, which is more than $100 billion higher than Apple’s.

However, meeting the expectations that made Nvidia the most valuable company in the world may prove difficult. The results for the third quarter exceeded Wall Street’s forecasts, but despite this, the stock fell about 2% after the market closed, as the deviation from expectations was the smallest since Nvidia’s AI business began growing last year.

Investors are likely to overlook this. The company’s previous report in August led to a larger drop in its shares, but they regained 24% of their value afterward. However, such volatility may become the norm for Nvidia in the coming year when the company is expected to launch new products that could face production and supply difficulties. Additionally, growing uncertainty regarding new tariffs and other obstacles from the Trump administration could limit Nvidia’s sales in China, where the company can no longer sell its most advanced chips.

How will investors evaluate Nvidia, which is still growing rapidly, but not as quickly as before? In the quarter ending in October, Nvidia’s revenue increased by 94% compared to the same quarter the previous year, marking the first time in the last five quarters that growth did not reach triple-digit percentages. The forecast for the next period is a 70% annual growth rate, meaning the company expects to generate $37.5 billion.

This forecast includes the launch of the new Blackwell AI line, which Nvidia introduced in March. However, only $2.4 billion in additional revenue compared to the previous quarter raises uncertainty about how quickly Blackwell will generate significant income.

The goals for Blackwell are ambitious—these chips are expected to generate $62.6 billion in fiscal year 2026 and over $97 billion the following year. These are large sums, but it will depend on how Nvidia’s major clients, such as Microsoft, Amazon, Meta, and Google, continue to invest. Forecasts suggest these tech giants will spend over $242 billion on capital expenditures this year and another $285 billion the next. However, this investment plan will depend on the pace at which their customers begin using the new AI generation services and their ability to build data centers that meet Nvidia’s requirements.

Nvidia is in a strong position, but it must continue to address the challenges ahead to maintain its growth in the future.