Zinger Key Points
- Nvidia's Blackwell chip launch delayed, now expected early 2025, per AWS.
- Despite delays, analysts project billions in Blackwell chip revenue for Q4.
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Nvidia Corp’s NVDA Blackwell chips will not be available before early 2025, affecting key clients like Amazon.com Inc’s AMZN cloud unit.
The artificial intelligence chip designer’s production challenge prompted Amazon Web Services to wait for bulk volumes of the chip to be produced for its data centers.
Amazon Web Services chief Matt Garman flagged the delay due to Nvidia’s production respin on Bloomberg Television.
Also Read: Microsoft Azure, Office 365, and Gaming To Drive Low Double Digit Growth: Analyst
Dell Technologies Inc DELL also voiced similar timelines for the availability of its Blackwell-based servers.
Recently, Nvidia chief Jensen Huang dispelled concerns over progress in developing Blackwell GPUs by citing tremendous demand for Nvidia’s Blackwell GPU, whose production is going as planned. KeyBanc analyst John Vinh expected Blackwell to generate over $7 billion in revenues in the fourth quarter.
Beth Kindig of I/O Fund projected that the Blackwell chips would help Nvidia reach a $10 trillion valuation by 2025. JPMorgan analyst Harlan Sur snubbed the lack of impact of Blackwell’s production delays on AI demand from the hyperscalars.
Earlier this week, Amazon.com inked a five-year deal with AI and data startup Databricks to offer businesses more affordable AI development tools. The collaboration focused on utilizing Amazon's Trainium AI chips, a cost-efficient alternative to Nvidia's widely used GPUs.
Databricks aims to transfer the cost savings from using Amazon's chips to its customers, allowing it to challenge Nvidia’s dominance in the market.
Nvidia stock gained over 227% in the last 12 months. Key supplier Taiwan Semiconductor Manufacturing Co’s TSM upbeat quarterly print further contributed to the rally. The contract chipmaker acknowledged insane AI demand. It expects demand for high-performance computing chips for servers to more than triple in 2024, Nikkei Asia reports.
Investors can gain exposure to Nvidia through SPDR Select Sector Fund – Technology XLK and iShares S&P 500 Growth ETF IVW.
Price Action: NVDA stock is up 0.84% at $138.09 at the last check Friday.
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