Nvidia’s Stock Suffers Setback following Announcement of New AI Chip

Nvidia’s Stock Suffers Setback following Announcement of New AI Chip

(Reuters) – Nvidia shares fell premarket on Tuesday after more than tripling in value over the past year, as the leading AI chip supplier unveiled its latest flagship product that is expected to further bolster its advances in the industry.

Shares of Wall Street’s third-most valuable company fell about 1%, with some analysts saying investors had already priced in the launch and were awaiting more details.

“If the brand new Blackwell chip did not trigger a new rally, it is because the arrival of a new, more powerful chip was already priced in,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

Shares of other chipmakers also fell. Super Micro Computer fell 1.5%, while Advanced Micro Devices lost 1.7% and Marvell Technology fell 2.2%.

In addition to the B200 “Blackwell” chip, the company on Monday introduced a new set of software tools at its highly anticipated annual developers conference, to help developers more easily sell artificial intelligence models to companies that use the technology from Nvidia.

The flagship B100 chip, which connects two squares of silicon the size of the company’s previous offering, is expected to be used by Amazon.com, Alphabet’s Google, Meta Platforms, Microsoft, OpenAI and Tesla.

Nvidia is also transitioning from selling single chips to selling complete systems.

“It will take time to assess Blackwell’s reported performance, but … the company’s ability to raise the bar so much places it in a very strong position,” Morgan Stanley analysts said in a note.

Many analysts expect Nvidia’s market share to fall by several percentage points this year as new competing products are launched and the company’s biggest customers make their own chips.

However, Nvidia’s market dominance is expected to remain unchallenged.

The company, which holds 80% of the AI ​​chip market, is expected to provide more details on pricing as well as the transition from H100 to B100 chips during its presentation to financial analysts at 11:30 a.m. ET (3:30 p.m. GMT) on Tuesday. .

Nvidia’s forward price-to-earnings ratio, a commonly used metric to evaluate stocks, came in at 34.6, below its three-year average of 42.

(Reporting by Medha Singh in Bangalore; Editing by Pooja Desai)

Source Reference

Latest stories