Nvidia, the artificial intelligence (AI) leader, has experienced a remarkable rise in its market value, driven by the increasing demand for its AI graphics processing units (GPUs). However, recent reports suggest that the company’s flawless execution may have hit a snag. According to reports, Nvidia has informed some of its top customers about a delay in the delivery of its Blackwell chip.
The chip, which was initially expected to be delivered later this year, is now pushed to the first quarter of 2025. The delay is attributed to potential design flaws and capacity constraints from Taiwan Semiconductor Manufacturing Company (TSMC), a key supplier for Nvidia. This setback, along with increased competition from companies like Advanced Micro Devices (AMD), indicates that Nvidia is not immune to challenges.
AMD’s recent second-quarter results impressed investors, partly due to its ramp-up of AI GPUs.
Nvidia faces Blackwell chip setback
The company’s MI300X chip is significantly cheaper than Nvidia’s H100, making it an attractive alternative, especially given the supply backlogs and the delayed Blackwell chip.
Furthermore, Nvidia’s top customers are developing their own AI chips, adding to the competitive pressure. Historically, every next-big-thing trend has seen leaders experience significant pullbacks once the initial euphoria fades. Although Nvidia’s established segments in gaming and crypto mining may provide a buffer, a pullback is likely based on historical patterns.
The delay in the Blackwell chip is seen as the first domino to fall, suggesting that the Nvidia sell-off may worsen in the coming weeks, months, or quarters. Investors should prepare for more volatility as AI and Nvidia’s role in it continue to evolve. It is important to note that this article contains insights and opinions that are speculative.
Investors are advised to conduct their own research or consult a financial advisor before making any investment decisions.
