Nvidia stock (NVDA) sank as much as 3.4% Monday before paring losses, following a new report from the Information highlighting overheating issues with its latest Blackwell artificial intelligence servers.
The news comes ahead of the AI chipmaker’s earnings report, which is slated for release after the market close on Wednesday.
It’s not the first time issues have been reported with the company’s Blackwell products. In August, the Information reported that the leading AI chipmaker was dealing with design flaws related to the individual Blackwell chips themselves.
Nvidia confirmed fears that Blackwell production would be delayed in its earnings report in late August, stating that production of the chips would ramp up in the December quarter rather than its previously stated goal to ramp during the September period. The company has not publicly confirmed any design flaws or overheating issues.
Nvidia told Yahoo Finance about its latest AI servers: “The engineering iterations are normal and expected.” Nvidia’s so-called GB200 NVL72 server system uses 72 Blackwell chips and 36 of its latest Grace CPUs. Nvidia said the servers are “the most advanced computers ever created.”
Those Blackwell chips are set to bring in “several billion dollars” in sales in the company’s fiscal fourth quarter, according to CEO Jensen Huang. Customers looking to use the Blackwell server system include Meta (META), Microsoft (MSFT), and Elon Musk’s xAI, according to the Information.
Despite reported issues, Dell Technologies CEO Michael Dell noted in a post on X Monday, following the Information’s report, that Dell is already shipping an unspecified number of Nvidia’s Blackwell servers as part of its latest AI hardware product, the PowerEdge System.
Nvidia shares closed Monday down 1.3% to $140.15.
As Yahoo Finance’s Dan Howley noted last week, even a stellar report and outlook from the company Wednesday could send its stock down further. Nvidia topped expectations across the board in its most recent quarterly report, for example, but shares still fell 6% immediately after it announced its results in late August.
Investor excitement over AI spending has also stoked fears Big Tech’s AI spending will ease — or sharply decline — punching AI chip companies in the gut.
Such fears were on display last Friday, when chip stocks fell across the board after a disappointing earnings report from Applied Materials (AMAT), which makes tech used by TSMC (TSM) to manufacture advanced computing chips such as Nvidia’s.
Nvidia shares closed Friday down 3.3%, while the PHLX Semiconductor Index (^SOX) fell 3.4%.
Still, Nvidia shares are up roughly 186% from last year. The chipmaker’s monumental rise has pushed it past Apple (AAPL) as the world’s most valuable company, and Nvidia recently replaced Intel on the Dow.
This post has been updated to include a comment from Nvidia.
Laura Bratton is a reporter for Yahoo Finance. Follow her on X @LauraBratton5.
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