Nvidia (NVDA) has become synonymous with the artificial intelligence (AI) revolution, leading the charge in advanced computing technologies and earning a reputation as a dominant player in the semiconductor industry. Following a blockbuster performance in 2024, the company now faces a new set of challenges that could influence its trajectory in 2025. Among these challenges are concerns raised by TF International Securities analyst Ming Chi-Kuo, who has flagged critical supply chain issues tied to Nvidia’s highly anticipated GB200 NVL72 offering.

The GB200 NVL72 is poised to be a game-changer for Nvidia, leveraging cutting-edge technology to deliver unprecedented computing power. Designed as a rack-scale solution with a 72-GPU NVLink domain, it promises up to 30x faster performance for real-time trillion-parameter language model inference, placing it at the forefront of generative AI capabilities. However, the advanced nature of this product has introduced complexity into its development and production timeline, leading to repeated delays that have raised red flags among investors and analysts alike.

In this article, we’ll take a closer look at the supply chain issues outlined in Kuo’s report, the potential impact of these delays on Nvidia’s growth story, and what this means for investors in 2025. Let’s dive in.

About Nvidia Stock

Nvidia (NVDA) is a premier technology firm known for its expertise in graphics processing units and artificial intelligence solutions. The company is renowned for its pioneering contributions to gaming, data centers, and AI-driven applications. Its market capitalization currently stands at $3.23 trillion.

After climbing nearly 179% last year, NVDA stock has shown subdued performance so far, with a slight increase of 1.6% year-to-date.

Analyst Raises Concerns Over GB200 NVL72 Mass Production

On Jan. 13, shares of Nvidia dropped about 2% following comments from TF International Securities analyst Ming Chi-Kuo, who raised concerns about the “low” visibility surrounding the mass production of the company’s GB200 NVL72 offering. This uncertainty presents some short-term risks for the chipmaker and its supply chain.

Notably, the NVIDIA GB200 NVL72 is an exascale computer in a single rack. It incorporates 36 Grace CPUs and 72 Blackwell GPUs into a rack-scale design. The GB200 NVL72 is a liquid-cooled, rack-scale solution featuring a 72-GPU NVLink domain that functions as a single, vast GPU, providing real-time trillion-parameter LLM inference that is 30 times faster. The NVIDIA GB200 NVL72 includes the GB200 Grace Blackwell Superchip, which integrates two high-performance NVIDIA Blackwell Tensor Core GPUs with an NVIDIA Grace CPU using the NVIDIA NVLink-C2C interconnect to the two Blackwell GPUs. 

Kuo explained that the mass production schedule for the GB200 NVL72 has experienced multiple delays, with the latest postponement pushing it to the second quarter of 2025. Kuo predicts that shipments could total between 25,000 and 35,000 racks in 2025, significantly lower than the previous estimates of 50,000 to 80,000 racks. “However, the biggest concern for market sentiment may not be the final shipment numbers themselves but rather the negative impact on market confidence from the repeated postponements,” he stated in his blog.

It’s important to highlight that the GB200 NVL72 involves a more intricate development process than standard servers, owing to its cutting-edge technology. Despite Nvidia’s strong supply chain, the complexity of this technology has extended the development timeline to between 1.5 and 2 years. Kuo said another postponement to the second half of 2025 wouldn’t be surprising, warning that such a delay could “undermine market confidence.” Investor skepticism is growing as they seek “clear evidence” of mass shipments, including metrics such as supply-chain checks or revenue figures.

Furthermore, the small shipments of the lower-spec GB200 and HGX models add to the uncertainty, providing limited reassurance to the market. Kuo mentioned that the forthcoming GB300 NVL72 might encounter similar production challenges, potentially delaying mass shipments until early 2026. However, the analyst highlighted that Nvidia’s issues stem from supply constraints rather than weak demand, indicating that the company is unlikely to reduce orders unless further complications arise. 

What to Expect from NVDA’s Q4 Earnings Report

Nvidia’s latest quarterly earnings were quite positive. The company posted record quarterly revenue of $35.1 billion, beating Wall Street’s estimates by $1.95 billion. Notably, data center revenue, which comprised about 88% of total revenue, hit a record $30.8 billion in Q3, marking a 17% increase from the previous quarter and a 112% surge year-over-year. The growth was fueled by robust demand for the company’s Hopper computing platform for training and inferencing of large language models, recommendation engines, and generative AI applications. Its adjusted earnings per share stood at $0.81, topping expectations by $0.06. With that, the top and bottom line figures represent an annual growth rate of nearly 100%.

However, the company’s growth will likely decelerate in the fourth quarter of fiscal 2025. Analysts tracking the company forecast a 61% year-over-year increase in its adjusted EPS to $0.79 for Q4, with revenue expected to climb 72.09% year-over-year to $38.04 billion. These rates remain strong in absolute terms, of course. At the same time, they might not impress investors given the high expectations priced in NVDA’s valuation multiples. Moreover, investors will keenly watch the company’s outlook. Notably, the stock trades at a forward price-earnings ratio (Non-GAAP) of 44.63x, which is roughly in line with its five-year average but remains 79.57% higher than the sector median of 24.85x. With that, any negative surprise in FQ4 results or guidance could trigger increased volatility in its stock price. 

One cause for concern regarding the company’s FQ4 revenue performance is reports indicating that orders for its Hopper GPUs were softer in November and December 2024. Consequently, this could hinder FQ4 revenue delivery.

Another headwind for the company in 2025 is the ongoing U.S.-China chip war. This week, the White House unveiled comprehensive new restrictions on the sale of advanced AI chips by Nvidia and its peers. The rules, scheduled to be implemented in one year, set limits on the amount of computing power that can be sold to most countries. In other words, those curbs limit the sale of AI chips from Nvidia and other leading manufacturers to data centers in the majority of countries.

This rule “threatens to squander America’s hard-won technological advantage” by “attempting to rig market outcomes and stifle competition,” Ned Finkle, Nvidia’s vice president of government affairs, said in a statement.

What Do Analysts Expect for NVDA Stock?

Overall, analysts maintain a positive outlook on Nvidia’s long-term growth prospects, as reflected in their consensus “Strong Buy” rating. Of the 43 analysts covering the stock, 36 recommend a “Strong Buy,” three suggest a “Moderate Buy,” and four rate it as “Hold.” The average price target for NVDA stock is $176.55, suggesting potential upside of 29.6% from current levels.