Nvidia unveiled the Blackwell chips in March but its launch has been delayed due to design issues.
Shares of Nvidia Corp. ($NVDA), which ended last week off their all-time highs, are in the spotlight as the artificial intelligence (AI) stalwart gears up to report its fiscal year 2025 third-quarter earnings. The stock could start the week on the backfoot amid a new report that flagged an issue with the company’s Blackwell AI accelerator chips.
An Information report, citing employees and customers, said Sunday the Santa Clara, California-based company’s latest AI chip Blackwell was found to overheat when connected together in the customer server racks it has designed.
The company has reportedly tried resolving the issue by asking suppliers to change the design of the racks several times. This has only served to generate anxiety among customers over potential delays in their usage of the servers powered by the Blackwell chips.
Nvidia unveiled the Blackwell chips in March but its launch has been delayed due to design issues. A report said in early September that the company executed changes to the Blackwell series’ six-layer graphic processing unit (GPU) mask, and so production could proceed without re-taping.
The updated B200 version would be completed by late-October, allowing it to go into mass production in December and deliveries to original device manufacturers will likely be made in the first quarter of 2025, the report said.
Nvidia supplies high-performance AI chips to big customers such as Meta Platforms, Inc. ($META), Microsoft Corp. ($MSFT) and Alphabet, Inc.’s ($GOOGL) ($GOOG).
The report comes ahead of the company’s quarterly results scheduled for Wednesday. Analysts, on average, estimate non-GAAP earnings per share of $0.75, higher than the year-ago’s $0.40. Revenue is estimated at $33.09 billion versus the $18.12 billion a year ago.
Nvidia shares have been on a bull run ever since the AI technology shot into prominence in early 2023, with the late-2022 launch of OpenAI’s ChatGPT large-language model. The stock has gained about 188% so far this year and it is the third best-performing S&P 500 stock.
It hit an intraday high of $149.77 on Nov. 7 and a closing high of $148.88 a session ahead of it, before pulling back.
Sentiment toward the stock has been mixed among users of the Stocktwits platform.
A user said he would shrug off bearish calls and hold onto Nvidia stock.
Another said he sees sideways movement until the earnings report.
Some are worried about the stretched valuation.
Nvidia ended Friday’s session down 3.26% at $141.98.
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