Key Takeaways
Nvidia (NVDA) shares plunged more than 7% in early trading on Monday after reports that the launch of the company’s long-awaited Blackwell Systems, which includes next-generation artificial intelligence (AI) chips, would be delayed amid a global sell-off due to concerns about the state of the U.S. economy.
Blackwell’s AI chip could be delayed by more than three months due to a design flaw, The Information reported, citing anonymous sources close to the company. According to the report, NVIDIA told Microsoft (MSFT) and another major cloud provider that it was experiencing delays.
The delay affects Amazon (AMZN), Alphabet’s (GOOGL) Google, Meta (META), Microsoft, ChatGPT-maker OpenAI, Tesla (TSLA) and Elon Musk’s xAI, among others.
Strong pre-launch demand for Blackwell has played a key role in Nvidia’s stock rally this year, boosting shares of Nvidia’s partners such as Micron Technology (MU) and Monolithic Power Systems (MPWR) and was expected to benefit other companies in the AI space as well.
Citi analysts removed Nvidia from their “upside watch” following reports of the delays, but said the delays could boost demand for Nvidia’s older AI chips as well as products from rivals such as Advanced Micro Devices Inc.
Following the news, NVIDIA shares fell 7.8% to $99.52 as of 10:20 a.m. ET on Monday, but despite Monday’s decline, the company’s shares have still doubled since the beginning of the year.
