Why Nvidia’s GPU shortage could cost gamers big this season

Nvidia has announced a potential shortage of gaming GPUs for the upcoming quarter due to production shifts and increased demand. The warning comes amidst the company’s record third-quarter revenue, which surged 94% year-over-year, totaling $35 billion. CFO Colette Kress indicated in the earnings call that supply constraints would likely lead to a sequential revenue decline in the fourth quarter.

This anticipated GPU shortage coincides with Nvidia’s strategic transition to prepare for its next-generation RTX 50-series “Blackwell” GPUs, expected to launch in 2025. The current production cutbacks primarily target the RTX 40-series, impacting availability just as the holiday shopping season approaches. As demand for powerful graphics cards intensifies, particularly for high-performance 4K gaming and AI applications, Nvidia is struggling to balance its inventory for both gamers and enterprise customers.

Historically, Nvidia’s production adjustments have followed patterns leading to pricing fluctuations and inventory shortages. The immediate effect includes limited availability of popular models, especially the RTX 4080 and RTX 4090, which may also see price increases. Retailers are already reporting dwindling stock levels for these cards, with some listings on platforms like Amazon reaching nearly $2,000 for the RTX 4090.

Despite these challenges, Nvidia remains optimistic about recovery, projecting a more balanced supply by early 2025 as production ramps up. Analysts note that the company’s dual focus on gaming and enterprise markets has yielded significant profits, but it might exacerbate short-term shortages. In Q3 alone, the data center segment generated $30.7 billion, accounting for 87.7% of total revenue, driven by robust demand for its H100/H200 GPUs.

Nvidia’s Blackwell GPUs are so hot, they could bake a cake

Reports indicate that Nvidia has halted production of nearly all its RTX 40-series graphics cards as it gears up for the RTX 50-series launch. Although Nvidia has not officially confirmed the discontinuation of the RTX 40-series, sources suggest this aligns with production trends in the lead-up to new product releases. The RTX 4090 was among the first to go out of production, resulting in immediate market impacts and intensified demand, making it difficult to source new units.

The transition to the upcoming Blackwell GPUs means the initial supply levels could be under pressure. Nvidia is expected to ship chips to its AIC partners soon, although official confirmation remains pending. It is widely anticipated that the company will introduce the first consumer Blackwell GPUs at CES 2025 in January, with models including the RTX 5090 and RTX 5080 likely to steal the spotlight.

Manufacturers may have to contend with a mismatch between supply and demand, particularly affecting the remaining RTX 40-series models during the holidays. Analysts foresee higher-than-average sale prices for GPUs as inventory elsewhere dwindles, creating an opportunity for Nvidia to clear out remaining models from the Ada lineup before the new series arrives.

Nvidia’s record financial performance highlights the advantageous position it holds in the market, with a net income soaring 109% year-over-year. The growing revenue from gaming, reaching $3.2 billion, underlines the ongoing interest in high-performing graphics solutions, even as broader supply challenges loom.

Nvidia’s strategic emphasis on the lucrative data center sector has implications for its consumer GPU market, as the company prioritizes production based on demand. The ongoing transitions within the graphics card supply chain underscore a crucial period for gamers, developers, and manufacturers alike. With less availability of current GPU offerings, NVIDIA’s ability to manage inventory effectively through the holiday period remains in focus.

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