Nvidia shares tumbled, extending the stock's one-month decline to around 23%, amid a major pullback in global tech stocks and reports of a delay in the delivery of its newly-designed AI chips known as Blackwell.
Blackwell Chips: Nvidia unveiled the Blackwell line of processors earlier this year, claiming they perform AI tasks at more than twice the speed of the current Hopper chips while using less energy and providing more flexibility.
Production Plans: Nvidia plans to ramp up production of the new processors over the second half of this year while continuing to sell its H100 "Hopper" series to hyperscaler clients like Microsoft, Meta Platforms, and Google parent Alphabet.
Hyperscaler Spending: Hyperscalers are estimated to spend around half a trillion dollars over the next two years building out their massive computing infrastructure.
CEO's Statement: Nvidia CEO Jensen Huang has called Blackwell potentially the "most successful product" in tech history.
Design Flaw: Tech-focused news outlet The Information reported that Nvidia informed Microsoft and another unnamed client about a design flaw in Blackwell, which could delay its production ramp and delivery dates by around three months.
Revenue Projections: Analysts expected Blackwell to generate revenues for Nvidia starting in Q3 2024 and enter global customer data centers by Q4 2024. AI demand and Nvidia's market share could drive data center revenues to as high as $150 billion next year, powered largely by Blackwell's launch.
Analyst Insights:
Benchmark Analyst Cody Acree: Highlighted the expected demand for H200 and Blackwell exceeding supply well into next year.
Goldman Sachs Analyst Toshiya Hari: Maintained a 'conviction buy' rating with a $135 price target, confident in Blackwell's contribution to Nvidia's growth despite near-term volatility.
Investor Concerns: Some investors worried that customers would cancel orders for older H100 chips in anticipation of the newer Blackwell processors.
Stock Performance: Nvidia shares were marked 9.5% lower in premarket trading, indicating a Monday opening price of $97.08 each. If this decline holds, it would drag the stock into bear market territory, typically defined as a 20% decline from a recent peak. Nvidia shares closed at an all-time high of $135.58 on June 18.
Blackwell Chips: Nvidia unveiled the Blackwell line of processors earlier this year, claiming they perform AI tasks at more than twice the speed of the current Hopper chips while using less energy and providing more flexibility.
Production Plans: Nvidia plans to ramp up production of the new processors over the second half of this year while continuing to sell its H100 "Hopper" series to hyperscaler clients like Microsoft, Meta Platforms, and Google parent Alphabet.
Hyperscaler Spending: Hyperscalers are estimated to spend around half a trillion dollars over the next two years building out their massive computing infrastructure.
CEO's Statement: Nvidia CEO Jensen Huang has called Blackwell potentially the "most successful product" in tech history.
Design Flaw: Tech-focused news outlet The Information reported that Nvidia informed Microsoft and another unnamed client about a design flaw in Blackwell, which could delay its production ramp and delivery dates by around three months.
Revenue Projections: Analysts expected Blackwell to generate revenues for Nvidia starting in Q3 2024 and enter global customer data centers by Q4 2024. AI demand and Nvidia's market share could drive data center revenues to as high as $150 billion next year, powered largely by Blackwell's launch.
Analyst Insights:
Benchmark Analyst Cody Acree: Highlighted the expected demand for H200 and Blackwell exceeding supply well into next year.
Goldman Sachs Analyst Toshiya Hari: Maintained a 'conviction buy' rating with a $135 price target, confident in Blackwell's contribution to Nvidia's growth despite near-term volatility.
Investor Concerns: Some investors worried that customers would cancel orders for older H100 chips in anticipation of the newer Blackwell processors.
Stock Performance: Nvidia shares were marked 9.5% lower in premarket trading, indicating a Monday opening price of $97.08 each. If this decline holds, it would drag the stock into bear market territory, typically defined as a 20% decline from a recent peak. Nvidia shares closed at an all-time high of $135.58 on June 18.