What's Going On With Nvidia Stock On Wednesday? - NVIDIA (NASDAQ:NVDA)
- Nvidia acknowledged a design flaw in its Blackwell AI chips, causing production delays.
- The chips are now scheduled for shipment in Q4 2024, significantly delayed from the original Q2 target.
- Despite setbacks, analysts project a strong future for Nvidia, anticipating significant revenue generation from the Blackwell chips.
On October 24, 2024, Nvidia Corp's stock fell 2.69% after CEO Jensen Huang acknowledged a design flaw in the company's new Blackwell AI chips. This admission came after Nvidia, in partnership with Taiwan Semiconductor Manufacturing Company, worked to rectify production delays affecting key clients such as Meta, Alphabet, and Microsoft. Initially showcased in March, these chips are now scheduled for shipment in Q4 2024, significantly delayed from the original target of Q2. Further complicating matters, Amazon faced delays in its data center plans reliant on these chips, pushing availability to 2025 due to production issues. Despite these setbacks, analysts maintain a positive outlook for Nvidia's future. Investment experts, including Beth Kindig from I/O Fund, anticipate that the Blackwell chips will be vital for achieving a projected $10 trillion valuation by 2025. KeyBanc’s John Vinh foresees the chips potentially generating over $7 billion in revenue during their first quarter of availability. Nvidia's response to the situation and its strategic partnerships in the AI sector, including collaborations with India and investments in Thailand, aim to bolster its market position. Moreover, while competing tech companies like Amazon are exploring alternatives for AI chip solutions, Nvidia continues to innovate and expand. The commitment to resolving production challenges highlights both the risks and the opportunities that lie ahead in the rapidly evolving AI space, particularly as demand for advanced AI technologies intensifies globally.