(Bloomberg) — Nervous investors in Nvidia Corp. are eagerly awaiting an update on the introduction of its Blackwell chip, hoping for a catalyst to halt the stock’s recent slide.
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The next-generation processor was unveiled six months ago, but has been plagued by technical issues that have delayed its release. While CEO Jensen Huang tried to reassure the market last month that revenue from the chip would start rolling in soon, some investors were left hungry for details. That — along with broader macroeconomic jitters — has contributed to a 15% sell-off since the earnings report.
Questions about Blackwell will be a major focus when Huang speaks Wednesday at a Goldman Sachs conference in San Francisco. He is scheduled to speak with David Solomon, Goldman’s CEO, at 7:20 a.m. local time.
“Nobody likes a slowdown,” said Brian Mulberry, client portfolio manager at Zacks Investment Management Inc. “It’s one of those setbacks that investors just latch on to.” In the absence of other positive catalysts for the stock — and combined with broader concerns affecting the entire technology sector — the Blackwell woes have added to worries that the artificial intelligence darling has risen too far, too fast.
While Nvidia has done a good job of managing expectations, “they could probably do a better job of communicating, particularly around the Blackwell issue,” Mulberry added.
Analysts at Bank of America shared that view, writing in a research note last week that details about Blackwell’s shipment readiness are the most important fundamental catalyst for a recovery in Nvidia stock.
Blackwell is the next generation of the company’s dominant AI processor and has been eagerly awaited by investors to deliver the next phase of growth. Nvidia acknowledged production issues in its latest earnings report and said it needed to revamp part of the chip’s manufacturing process.
Still, the company said it expects to generate “several billions of dollars” in revenue from Blackwell in the fiscal fourth quarter, which ends Jan. 31. Production is expected to begin in the fourth quarter and run into fiscal 2026, according to comments on the earnings call.
If all goes smoothly and Nvidia can deliver its Blackwell chips on schedule, the stock could be less volatile than it has been in recent months, Mulberry said.
They’ve said they can get things up and running in early 2025 and “if they can clearly communicate that they’re still on track and that there will be no further delays in production, they can alleviate some of these short-term fears,” he said.
However, if Blackwell faces further delays or problems, it could add downward pressure on the shares, especially with few other catalysts on the horizon and potential risks associated with a U.S. Department of Justice antimonopoly investigation.
Randy Hare, a portfolio manager at Huntington National Bank, agrees that the pressure on Nvidia’s stock will likely be negative in the short term. Still, for investors who believe in AI’s long-term potential, it could be a good time to add to positions.
“We’re maybe halfway through the mid-cycle correction,” Hare said. “And then I think you’re going to have a good opportunity where people realize this is the best growth area in the market and they’re going to start putting money to work again.”
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–With assistance from Jeran Wittenstein and Subrat Patnaik.
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