Why Nvidia’s Supply Can’t Keep Up with Soaring Demand, Says CEO Jensen Huang
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Nvidia (NVDA) is experiencing an unprecedented surge in demand that far outstrips its current supply capabilities, according to CEO Jensen Huang. Despite the company’s recent impressive earnings report, the challenge lies in meeting this overwhelming demand.
In an exclusive interview with Yahoo Finance following Nvidia’s first-quarter earnings report on Wednesday, Huang addressed concerns about a potential dip in demand as the company transitions from its current Hopper AI platform to the more advanced Blackwell system. “People want to deploy these data centers right now,” Huang stated. “They want to put our graphics processing units to work immediately and start making money and saving money. The demand is just so strong.”
The transition from Hopper to Blackwell had some Wall Street analysts speculating that customers might hold off on Hopper orders in anticipation of Blackwell’s release later this year. However, Huang dismissed these concerns, noting, “Hopper demand grew throughout this quarter—after we announced Blackwell—which indicates how strong the demand truly is.”
Despite this robust demand, Nvidia faces significant supply constraints. Huang explained that the complexity of the company’s AI chips poses a substantial challenge. “Every component, every part of our data center, is the most complex computer the world has ever made,” he said. “It’s sensible that almost everything is constrained.”
Nvidia’s first-quarter performance exceeded Wall Street expectations, with adjusted earnings per share reaching $6.12 on revenue of $26 billion—an increase of 461% and 262%, respectively, from the previous year. The company’s non-GAAP operating income for the quarter totaled $18.1 billion. Looking ahead, Nvidia projects revenue for the current quarter to be $28 billion, plus or minus 2%, surpassing analysts’ expectations of $26.6 billion.
In addition to its strong earnings, Nvidia announced a 10-to-1 stock split, which will take effect on June 10 for shareholders of record as of June 7. The company also boosted its quarterly dividend, with shareholders now set to receive $0.10 per share, up from $0.04.
Nvidia’s stock surged by as much as 6% in extended trading on Wednesday. Huang also elaborated on Nvidia’s strategy for transitioning from AI training—where companies train AI models—to AI inferencing, where those models are deployed for customer use. There have been questions about whether major cloud providers like Microsoft (MSFT), Google (GOOG, GOOGL), and Amazon (AMZN) might opt for their own chips for inferencing rather than Nvidia’s.
Huang remains confident in Nvidia’s position. “We have a great position in inference because inference is just a really complicated problem,” he explained. “The software stack is complicated. The type of models that people use is complicated. The vast majority of inferencing today is done on Nvidia. We expect that to continue.”
Huang also highlighted the growing demand for Nvidia’s chips beyond the major cloud service providers, noting that companies such as Meta (META), Tesla (TSLA), and various pharmaceutical firms are increasingly purchasing Nvidia’s products. In particular, the automotive sector is a significant customer for Nvidia’s data-center chips, excluding cloud companies.
“Tesla is far ahead in self-driving cars,” Huang noted. “But every single car, someday, will need to have autonomous capability.”
As Nvidia navigates these supply challenges, the company remains focused on meeting the surging demand and maintaining its leadership in the AI and semiconductor industry. Latest updates from the business world suggest that Nvidia’s strong performance and strategic initiatives will continue to position it as a dominant player in the market, despite the hurdles it faces.
This story was originally featured on Yahoo
