Nvidia Corp., the chipmaker at the heart of an artificial intelligence boom, delivered a revenue forecast that failed to meet the highest expectations, suggesting that the company’s dizzying growth run has its limits.

Fiscal fourth-quarter sales will be about $37.5 billion, Nvidia said in a statement Wednesday. Though the average analyst estimate was $37.1 billion, according to data compiled by Bloomberg, projections ranged as high as $41 billion.

The outlook signals that AI excitement may be getting ahead of reality. Nvidia investors bid up the shares nearly 200% in 2024, turning it into the world’s most valuable company. But the chipmaker has had trouble keeping up with demand for its products and struggled with production snags this year.

Chief Executive Officer Jensen Huang said that Nvidia’s new lineup, called Blackwell, is now in “full production.” Demand for the highly anticipated products is expected to exceed supply for several quarters. And there’s still an appetite for Hopper, the previous design, Huang added.

“AI is transforming every industry, company and country,” he said in the statement. “Industrial robotics investments are surging with breakthroughs in physical AI, and countries have awakened to the importance of developing their national AI and infrastructure.”

But some investors were looking for more of a blowout quarter. Shares of Nvidia fell about 2% in extended trading following the announcement. They previously closed at $145.89 in New York.

Even with a disappointing outlook, Nvidia’s growth over the past two years has been staggering. Its sales are poised to double for a second year in a row, and it now notches more money in profit than it used to generate in total revenue.

Nvidia’s revenue rose 94% to $35.1 billion in the fiscal third quarter, which ended Oct. 27. Excluding certain items, profit was 81 cents a share. Analysts had predicted sales of about $33.25 billion and earnings of 74 cents a share.

Nvidia’s biggest division, the data center unit, saw revenue double from a year earlier to $30.8 billion. That beat Wall Street estimates.

But networking revenue within that unit declined sequentially, and the business is more dependent than ever on a small group of customers: cloud service providers. That cohort, which includes companies such as Microsoft Corp. and Amazon.com Inc.’s AWS, accounted for 50% of data center revenue, up from 45% in the prior period.

Investors want that number to go down, to show that the use of AI is spreading across the economy.

The company’s biggest moneymaker is its accelerator chip, which helps develop AI models by bombarding them with data. Since OpenAI’s ChatGPT chatbot debuted in 2022, a frenzy of artificial intelligence services has created insatiable demand for the product.

Other recent earnings reports have given strong signals for AI. Nvidia customers, including Microsoft, Amazon and Meta Platforms Inc., have reaffirmed their commitment to spend heavily on AI infrastructure.

Nvidia looks to stay ahead of rivals by accelerating its pace of innovation. That includes a commitment to updating its lineup annually. With Blackwell, it has a new collection of chips that are faster and have an improved ability to link up with other semiconductors.

But manufacturing challenges have slowed the Blackwell rollout. For now, Nvidia can’t fill all the orders it’s receiving, the company has said. After production improves, supplies will be plentiful, according to Huang.

Nvidia warned again of supply constraints for Blackwell on Wednesday.

“Critical questions around Blackwell’s production ramp and customer concentration remain key concerns,” Emarketer analyst Jacob Bourne said in a note. “There’s little room for execution missteps in 2025.”

Nvidia has only missed analysts’ estimates on quarterly revenue once in the past five years. And it has exceeded expectations by as much as 20% in recent periods, creating a high bar for its performance.

Its data center division alone now has more revenue than its two nearest rivals, Intel Corp. and Advanced Micro Devices Inc., have in total combined. Net income this year is on course to exceed revenue at Intel, a business that was the chip industry’s biggest company for decades.

Nvidia made its name by selling graphics processors, but discovered that the technology also has applications for AI. Its chips help software models during the training process, when they learn to recognize and respond to real-world inputs. Nvidia’s components are also used in systems that then run the software, a stage known as inference, and help power services such as ChatGPT.

The Santa Clara, California-based company has rapidly expanded its product lineup to include networking, software and services, as well as fully built-out computer systems. Huang is traveling the world lobbying for a broader adoption of his technology and trying to spread its use by corporations and government agencies.

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