Nvidia (NASDAQ:NVDA) stock has soared to the top of the market-cap leaderboard, thanks to insatiable demand for its best-in-class AI chips. The semi giant has practically cornered the AI chip market, securing a dominant position with a market share exceeding 80%.
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However, even a dominant player like Nvidia isn’t immune to investor anxieties. Despite its cutting-edge products, the stock has struggled to gain traction this year as concerns mount over what’s next. Lingering uncertainties surrounding its highly anticipated Blackwell GPU architecture have added to the cautious sentiment.
The Blackwell chips were originally slated for mass production in 4Q24. However, reports at the time indicated that the new AI architecture had a design flaw. While Nvidia stated that the issue had been resolved, recent reports suggest that leading customers are postponing orders for Blackwell GPUs due to overheating concerns.
In fact, the delay in Blackwell’s rollout was cited as the primary reason AI server maker Super Micro Computer’s (NASDAQ:SMCI) FY25 revenue forecast fell $3.75 billion below its previous guidance at the midpoint. Super Micro’s management has stated that they have yet to receive an allocation for the GB200.
Given that Nvidia claimed at CES last month that Blackwell shipments had already reached more than a couple billion, Lynx Equity analyst KC Rajkumar thinks that is odd.
“NVDA CFO said at CES that ‘all is on track’ and ‘we are working with partners on things like liquid cooling’. And here is SMCI, the leader in liquid cooling technology, saying that it is yet to receive allocation of GB200,” Rajkumar said.
This raises the question: Have Blackwell shipments been further delayed since CES? During its June quarter earnings call, Super Micro’s management was uncertain whether Blackwell would ship in the December quarter. Now, in the March quarter, they still lack visibility into GB200 availability.
“We suspect SMCI management has largely scrubbed Blackwell from FY25 revenue outlook,” Rajkumar observed, cautioning investors not to overlook this negative read-through for Nvidia.
Most on the Street, however, keep a decidedly upbeat stand regarding NVDA; based on a mix of 37 Buys and just 3 Holds, the stock claims a Strong Buy consensus rating. Meanwhile, the average price target of $178.86 makes room for 12-month returns of 32%. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
