08:24 AM EST, 11/11/2024 (MT Newswires) -- Nvidia ( NVDA ) is still expected to rake in billions of revenue in January from the launch of its Blackwell chip, alongside an expected spike in demand for the H200 chip, but yields would be "immature" as supply constraints remain, Morgan Stanley said Monday in a note.

"We do expect better gross margins in October, but we do expect that the initial Blackwell ramp will come at lower margins starting in January," analysts from Morgan Stanley wrote.

Nvidia ( NVDA ) previously guided a decline of 70 basis points for its GM chip series to 75% in October from July, Morgan Stanley pointed out. There should also be minimal mix of related headwinds in October with no Blackwell yet and only a small increase in the H200, the bank said.

"The ramp of Blackwell and associated products (Grace, NV LInk switches, spectrum X) all brings immature yields and a little bit of margin uncertainty, so we would expect the company to still caution for further gross margin headwinds," Morgan Stanley said.

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