Nvidia Earnings at Risk from Electricity Shortage, Not Chip Demand
Nvidia's streak of beating analyst estimates may soon come to an end. The company has consistently exceeded expectations for 15 straight quarters, but VanEck analysts warn that a potential electricity shortage could disrupt this trend. According to VanEck, the biggest threat to Nvidia's earnings is not demand for its chips, but rather whether customers can get enough power to run them.
Nvidia's customers will require around 30 gigawatts of U.S. power through 2027, but only 15-25 gigawatts of new data centers with available power are expected to come online each year. This potential shortfall could lead to a significant revenue drop for Nvidia, with VanEck estimating that every 1GW it can't energize represents around $37 billion in lost revenue.
The analysts also warn that a 3GW shortage could result in an 18% revenue decline. With analysts expecting Nvidia to report third-quarter earnings per share of $2.38 and revenue of $104.19 billion, VanEck's warning highlights the real threat of Nvidia missing optimistic estimates from analysts.