Key Takeaways
- Nvidia shares tumbled Monday after reports that its Blackwell artificial intelligence (AI) chips will be delayed, amid a global sell-off driven by worries about the U.S. economy.
- The Blackwell chip will be delayed by at least three months due to design flaws, The Information reported.
- The delay would affect Amazon, Alphabet, Meta, Microsoft, OpenAI, Tesla, and others.
- Citi analysts, who removed Nvidia from their “upside catalyst watch,” said that the delay could raise demand for Nvidia’s older AI chips and competitors’ products, like AMD’s.
Nvidia (NVDA) shares plummeted over 7% in early trading Monday following reports that the company’s highly anticipated Blackwell system, including its next-generation artificial intelligence (AI) chips, will be delayed, amid a global sell-off driven by worries about the state of the U.S. economy.
The Blackwell AI chip could be held up by three months or more because of design flaws, The Information reported, citing anonymous sources close to the company. Nvidia told Microsoft (MSFT) and another large cloud provider there was a delay, the article said.
A delay would affect Amazon (AMZN), Alphabet’s (GOOGL) Google, Meta (META), Microsoft, ChatGPT maker OpenAI, Tesla (TSLA), and Elon Musk’s xAI, among others.
Strong demand for Blackwell ahead of its rollout played a key role in helping drive Nvidia’s stock higher this year, and was expected to lift Nvidia partners like Micron Technology (MU) and Monolithic Power Systems (MPWR), as well as benefit others in the AI space.
Citi analysts, who removed Nvidia from their “upside catalyst watch” following reports of the delay, said it could raise demand for Nvidia’s older AI chips and products from competitors like Advanced Micro Devices (AMD).
Nvidia shares were down 7.8% at $99.52 as of 10:20 a.m. ET Monday following the news, though even with Monday’s losses, the stock has doubled in value since the start of the year.