Nvidia Targets 70% Revenue Growth Amid Supply Bottlenecks

Nvidia Corp. reported earnings indicating a continued surge in the artificial intelligence boom, targeting revenue growth of approximately 70% for fiscal 2028. This projection significantly exceeds the Wall Street consensus estimate of 45%.

Despite the strong revenue outlook, the company guided its gross margins lower. Management attributed this decline to supply chain scarcity rather than a drop in demand. Nvidia is paying higher prices to secure critical components, which has effectively shifted pricing power to its suppliers.

To address these bottlenecks, Nvidia committed billions of dollars to secure supply from optical networking firms Lumentum Holdings Inc. and Coherent Corp. The shift suggests that the primary constraints in the AI industry are moving from compute and servers toward memory and optical networking, creating new profit opportunities for the companies controlling these scarce resources, including memory suppliers Micron Technology and SanDisk Inc.