Nvidia Stock Drops On Report Amazon Has 'Fully Transitioned' AI Chip Orders: The Details (UPDATED)

Editor’s note: This story has been updated with comment from an Amazon spokesperson.

NVIDIA Corp NVDA shares are falling in early trading Tuesday following a report suggesting Amazon.com Inc AMZN halted orders of the company’s “superchip” in order to wait for updated models.

What To Know: According to a Financial Times report, Amazon’s cloud computing business has stopped ordering Nvidia’s most advanced superchip as the company plans to wait for more powerful models that were introduced this year.

Nvidia released its next-generation chip architecture in March called Blackwell. Blackwell GPUs contain 208 billion transistors and are expected to cost somewhere between $30,000 and $40,000. Nvidia CEO Jensen Huang said the Blackwell chip will be twice as powerful as Nvidia’s Grace Hopper, which was released about a year earlier.

Amazon Web Services reportedly told the Financial Times that the company has “fully transitioned” away from its previous orders for Hopper superchips and is now ordering Nvidia’s latest Grace offering, citing a small window of time between the release of Hopper and Blackwell.

UPDATE: "To be clear, AWS did not ‘halt' any orders from NVIDIA. In our close collaboration with NVIDIA, we jointly decided to move Project Ceiba from Hopper to Blackwell GPUs, which offer a leap forward in performance,” an Amazon spokesperson told Benzinga in a statement Tuesday afternoon.

The report indicates that Nvidia declined to comment on the developments because of the quiet period it’s in ahead of its quarterly earnings report this week.

Most analysts expect Nvidia to continue to highlight enormous demand for its AI chips, but others like Citigroup have expressed concerns that there could be a bit of an “air pocket” in demand between Hopper and Blackwell.

Morgan Stanley analysts also warned this week that there is some “anxiety” on Wall Street about a potential slowdown in demand ahead of the Blackwell rollout.

Nvidia is due to report financial results for the first quarter after the market close on Wednesday. The company is expected to report earnings of $5.59 per share and revenue of $24.645 billion, according to Benzinga Pro.

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NVDA Price Action: Nvidia shares are up nearly 90% year-to-date. The stock was down 1.13% at $937.07 at the time of publication Tuesday, according to Benzinga Pro.

Photo: courtesy of Nvidia.