Nvidia forecast its slowest revenue growth in seven quarters on Wednesday, falling short of high expectations from investors who have helped make it the world’s most valuable company.

Nvidia shares fell 5% after posting results but recovered to trade down 2.5% after hours, closing 0.8% lower in regular trading.

Despite this, Nvidia’s stock has surged over 20% in the past two months and is up nearly four times this year, with a market value of $3.6 trillion.

The company is launching its new Blackwell family of AI chips, which will temporarily impact gross margins but improve over time.

Nvidia is set to exceed sales projections for the new chips in Q4, according to CFO Colette Kress.

CEO Jensen Huang dismissed reports of overheating issues with a flagship liquid-cooled server, stating there are no issues with the new systems.

Nvidia’s Blackwell chips will initially have gross margins in the low 70% range, improving to the mid-70% as production increases.

The company forecasts $37.5 billion in revenue for Q4, slightly above analysts’ estimates of $37.09 billion.

Nvidia’s forecast shows a slowdown in revenue growth to 69.5%, down from 94% in Q3.

The company reported third-quarter earnings of 81 cents per share, surpassing the estimate of 75 cents.

Data centre sales, which comprise most of Nvidia’s revenue, grew 112% to $30.77 billion, though this was slower than the 154% growth in Q2.

Nvidia’s sales continue to benefit from cloud companies’ investments in chips for generative AI processing. The company’s adjusted gross margin shrank to 75%.

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