Seaport Research Partners analyst Jay Goldberg estimates that only 30 gigawatts of the 55 gigawatts of AI data center capacity announced for 2027 will materialize, Barron's reported Friday. The forecast implies a potential 45% shortfall next year, threatening future demand for Nvidia chips. Goldberg retains a Sell rating on Nvidia and a $180 price target, about 15% below Thursday's closing price. Goldberg identifies shortages of electricians, gas turbines and electricity connections as major barriers.
Microsoft recently withdrew from an Nvidia-backed Nscale data center project in England after the anticipated electricity connection was delayed into the 2030s. The planned facility would accommodate more than 23,000 Nvidia GPUs. Amazon has encountered similar difficulties, leaving some Nvidia servers in warehouses until data centers have sufficient electricity to run the servers.
Nvidia also provides financing to some prospective chip customers. Goldberg argues that investments, loans and credit guarantees effectively discount Nvidia chips, supporting sales without official price reductions. Goldberg believes Nvidia prefers 200 smaller customers dependent on Nvidia over reliance on three powerful technology giants. Smaller cloud providers, including CoreWeave and Nebius Group, require substantial financing to continue purchasing Nvidia chips. Financial difficulties at those providers could weaken Nvidia sales and put pressure on Nvidia's margins.
Nvidia had $279 billion in supply and capacity commitments as of July 26, more than twice the $119 billion recorded a quarter earlier. Nvidia also disclosed $36 billion in cloud-service commitments to providers that purchase Nvidia hardware. Nvidia warned in the latest quarterly filing that infrastructure shortages could postpone chip purchases and reduce revenue. Some supply commitments are adjustable or cancellable.
However, research firm SemiAnalysis identifies more than 24 gigawatts already at an advanced construction stage across 40 campuses. SemiAnalysis researchers wrote Monday that very large sites are being built and many remain on schedule. A construction delay does not automatically eliminate a sale for Nvidia. Chips could be redirected to customers with electricity available. Goldberg expects Nvidia to achieve record sales into early 2027, but Goldberg believes risks will increase over the subsequent year.
Polymarket odds that Nvidia will end 2026 as the world's most valuable company declined from above 80% earlier this month to 56% on Friday morning. Apple's odds rose to 41% in that snapshot. Nvidia shares finished Thursday at $212.21, a decline of 4.4%.
Nvidia Faces 45% Shortfall in 2027 Data Center Capacity Plans
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Summary
Value investing in crypto traders are tracking a key risk as Seaport Research analyst Jay Goldberg estimates only 30 gigawatts of the 55 gigawatts of planned AI data center capacity for 2027 will be built, a 45% shortfall. Shortages of electricians, gas turbines and electricity connections are holding progress back. Microsoft recently dropped an England data center project due to grid delays, and Amazon faces similar bottlenecks. Nvidia reported $279 billion in supply commitments as of July 26, up from $119 billion a quarter earlier. TA for crypto analysts highlight that while 24 gigawatts are already under construction, demand for Nvidia chips may weaken after early 2027 as obstacles mount.
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