Why Nvidia Stock Is Losing Steam Premarket Today

Nvidia shares were pulling back on Monday's premarket after a report said its AI chip customer Microsoft is working on an in-house chip.

Shares of AI chipmaker Nvidia Corp. NVDA are moving sharply lower in premarket trading on Monday.

The immediate catalyst weighing down on the stock is an “Information” report that said Microsoft Corp. MSFT, one of the major customers for Nvidia’s AI chip, will launch its first in-house AI chip at its annual developers' conference as early as next month.

The report also said Microsoft has been working on the chip for years. The chip, the report said, is designed for data center servers that train and run large language models, the software behind conversational AI features such as OpenAI’s ChatGPT.

CNBC Mad Money host shrugged off the report as “misinformation,” and said he would not sell Nvidia on the rumor.

Nvidia’s stock could also be reacting to the Israel-Hamas conflict that is weighing down on growth stocks in particular. Last week, the shares of the chipmaker rallied over 5% along with fellow tech stocks amid the broader market rebound.

In premarket trading, Nvidia fell 2.01% to $448.41, according to Benzinga Pro data.

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