Nvidia has cautioned gamers about potential graphics card shortages during this holiday season, even as the company reports record-breaking financial results for its third quarter. The tech giant's net income doubled year-over-year, driven by exceptional performance in its data center business and steady growth in gaming revenue.
During the recent earnings call, Nvidia CFO Colette Kress highlighted strong gaming performance across notebook, console, and desktop segments in Q3. However, she warned of an expected decline in fourth-quarter revenue due to supply constraints.
The gaming division generated $3.2 billion in revenue, marking a 15% increase from the previous year. Despite these impressive figures, the company faces challenges in meeting market demand this quarter.
The supply shortage may stem from multiple factors, including the anticipated launch of next-generation Blackwell RTX 50-series GPUs and the gradual phase-out of RTX 40-series production. Industry observers note existing shortages of high-end RTX 40-series models, compounded by increasing demand from the AI and data center sector.
Kress reassured stakeholders about the temporary nature of these constraints, stating, "Our gaming supply was moving quite fast. The challenge is how quickly we can get supply ready for this quarter." She expressed confidence in supply recovery as the company enters the new calendar year.
Market speculation suggests Nvidia has reduced RTX 40-series production to prepare for a Blackwell launch in January. Recent price increases, particularly for the RTX 4090, appear to support these claims. The company is expected to unveil its first Blackwell GPUs at CES 2025, likely introducing the RTX 5090 and RTX 5080 models.
The current shortage primarily affects RTX 40-series availability, with particular impact on laptop sales during the holiday season. Reports indicate Nvidia will maintain production of select RTX 40 mobile chips alongside future RTX 50 variants.
In its financial report, Nvidia posted remarkable results with revenue reaching $35 billion, representing a 94% year-over-year increase. The company's net income jumped to $19.3 billion, marking a 109% rise compared to Q3 23. The data center segment dominated revenue contribution at $30.7 billion, accounting for approximately 87.7% of total earnings, potentially influencing the company's resource allocation between data center and consumer GPU production.