Nvidia's supply snags limit deliveries even as demand booms, shares down

Published On Nov 21, 2024, 4:30 AM

Nvidia's recent revenue forecast disappointed investors, leading to a drop in shares. Despite a booming demand for AI technology, the company faces significant supply chain constraints, which are expected to result in demand outstripping supply for some time. Key issues include production difficulties with their new Blackwell chip and a design flaw that reduced production yields. While Nvidia has shipped samples of Blackwell and expects strong sales, the production ramp-up is putting pressure on profit margins, which could impact revenue projections going forward.

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Nvidia's shares fell in response to a disappointing revenue outlook due to supply chain constraints and a flawed production process for their new chip. However, strong long-term demand for Nvidia's products suggests a potential recovery once production issues are resolved. Investors should remain cautious about near-term volatility but consider long-term growth prospects as AI demand continues to rise.

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