Nvidia's Blackwell Chip Delays Spark Investor Concerns
Nvidia Faces Investor Scrutiny Over Blackwell Chip Delays
Nvidia Corp's (NASDAQ: NVDA) investors are growing anxious as they await critical updates on the company's Blackwell chip rollout. The anticipation builds as Nvidia's chief, Jensen Huang, prepares to address investors at an upcoming conference.
Market Reaction to Chip Delays
Recently, Nvidia's stock saw a significant decline of 15% following its quarterly earnings report, which revealed ongoing engineering challenges affecting the Blackwell chip's launch timeline. This decline has led to increased scrutiny from analysts and investors alike, who are eager to see how these issues will be resolved.
Future Revenue Expectations
Despite the setbacks, Nvidia is optimistic about the Blackwell chip's potential, projecting several billion dollars in revenue for the fourth fiscal quarter. This revenue forecast could help stabilize the stock if executed successfully.
Analysts Weigh In
Investment professionals like Brian Mulberry from Zacks Investment Management have expressed concern over the chip's delay, especially with few positive triggers in the market. Analyst insights suggest that a timely launch of Blackwell is crucial to mitigating stock volatility.
AI Market Impact
Chris Grisanti from Mai Capital Management remains optimistic, highlighting the robust artificial intelligence ambitions that other tech giants like Microsoft Corp (NASDAQ: MSFT) and Amazon.Com Inc (NASDAQ: AMZN) are pursuing, which could bolster Nvidia's market position.
Positive Trends in Supply Chain
On a brighter note, Taiwan Semiconductor Manufacturing Co (NYSE: TSM), a key supplier for Nvidia, reported impressive 33% growth in revenue for August 2024. This statistic underscores the ongoing surge in demand for Nvidia’s AI-focused chips, hinting at a potential recovery in the market.
Long-term Growth Potential
Despite the recent selloff, Nvidia's stock has exhibited a remarkable increase of over 137% in the past year. Investors can explore various options for exposure to Nvidia through ETFs such as iShares Russell 1000 Growth ETF (NYSE: IWF) and iShares S&P 500 Growth ETF (NYSE: IVW).
Price Action Snapshot
At last check, NVDA stock saw a slight decrease, resting at $106.08. This fluctuation reflects ongoing investor sentiment surrounding the unresolved issues with the Blackwell chip.
Frequently Asked Questions
What are the main concerns regarding Nvidia's Blackwell chip?
The primary concerns relate to delays in the chip's rollout due to engineering snags, which have negatively impacted investor confidence and stock performance.
How much revenue does Nvidia expect from the Blackwell chip?
Nvidia forecasts several billion dollars in revenue from the Blackwell chip in its upcoming fiscal fourth quarter, pending a successful launch.
What has been the impact of the chip delays on Nvidia's stock?
Following the announcement of delays, Nvidia's stock experienced a 15% drop, prompting increased scrutiny from investors and analysts.
Are there positive indicators for Nvidia's future?
Yes, despite the current challenges, Nvidia's key supplier reported significant growth, suggesting a potential recovery in demand for AI chips.
How can investors gain exposure to Nvidia?
Investors can gain indirect exposure to Nvidia through various growth-oriented ETFs, offering a diversified investment avenue in the tech sector.
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