Nvidia shares have fallen after investors were not impressed by signs of stagnation in growth and production issues for the chip manufacturer. However, the company posted a 122 percent increase in Q2 revenues compared to the same quarter last year.
The chip manufacturer posted Q2 revenues of $30 billion, beating the expected $28.7 billion set by industry analysts.
However, this was not enough to maintain investor confidence in the company, especially after concerns of stagnation in the progress of its newest AI chip, codenamed Blackwell.
This lack of trust from investors is evident in that stock fell by 7 percent in pre-market trading before cutting its losses to 3.4 percent at midday on Wednesday in New York’s Nasdaq.
The Silicon Valley Company is currently the third most valuable company in the world, with a market value of $3.1 trillion. However, its status as such a valuable company does not protect it from enduring some heavy losses in its stock market value.
In fact, after the fall of its stocks, Nvidia lost more than $100 billion from its stock market valuation.
Nvidia’s partial recovery from this fall seems to be related to an increasingly positive tendency for the tech industry in the stock market. On Thursday, Google, Apple, and Amazon all saw their stock prices rise by noon.
Analysts suggest that the tendency to rely on tech companies once again is what allowed Nvidia to partially recover from its fall, not the company itself.
Nvidia’s Blackwell chips were delayed in January
At the beginning of 2024, Nvidia announced that its Blackwell chips would be delayed by several months. The chips that contain 208 billion transistors are due to be used to carry out calculations to train the company’s large AI language model.
Additionally, Nvidia’s chief executive, Jensen Huang, had previously claimed Blackwell chips would generate large revenues for the 2024 fiscal year.
By late August 2024, this launch has not yet happened. It is expected that Blackwell chip production will be ramped up in Q4 2024, but the chip is not expected to be widely available until early 2025.
Head of Research at the investment bank Panmure Liberum spoke on this subject:
“There were just some signs around the edges in numbers that rate of growth was trying to slow. Their current AI chip ‘hopper’ is selling well, but the next one, the next generation Blackwell, has faced some production delays, and that perhaps is one of the reasons why Wall Street, after hours, sold off the stock.”
Some of these delays are largely due to manufacturing issues that have now been addressed by the Taiwanese semiconductor firm TSMC.
They were able to put together early samples of the Blackwell chip that have been given to small clients, not large firms.
It remains to be seen whether Nvidia can keep posting record revenues while their Blackwell chip mass distribution remains delayed for the public.
