NVIDIA (NASDAQ: NVDA) Faces Blackwell Chip Delay: Citi Maintains Buy Rating Despite Setback
In a recent update, Citi reaffirmed its Buy rating and $150.00 stock price target for NVIDIA Corporation (NASDAQ: NVDA) despite the expected delay in the release of the company's Blackwell chips. The delay is projected to impact NVIDIA's Blackwell GPU units forecast for the January quarter, with a three-month setback anticipated.
Citi's analysis suggests that the demand for artificial intelligence (AI) could lead to increased orders for NVIDIA's H100 and H200 GPUs, partially offsetting the decline in Blackwell sales. While the July and October quarter data center sales forecasts remain stable, there is an expected 15% impact on the January quarter data center sales due to the Blackwell delays. As a result, Citi has adjusted its fiscal year 2025 sales projections downward by 5%.
Despite the setback, Citi predicts that NVIDIA will maintain its dominant position in the AI GPU market, holding around 90% market share in the long term. The delay in Blackwell chip availability could provide an opportunity for NVIDIA's competitor, AMD, to establish itself in the market.
Looking ahead, Citi does not anticipate significant changes to NVIDIA's NVL GB200 volumes for the next fiscal year. Additionally, the firm notes the potential impact of new U.S. restrictions on B20 AI GPUs being shipped to China in the upcoming year.
In other recent news, Microsoft (NASDAQ: MSFT) and Tesla (NASDAQ: TSLA) faced challenges in July, with Microsoft experiencing a decrease in market capitalization due to revenue shortfalls, while Tesla's profit margins shrunk but its market cap increased on positive growth outlooks.
On the other hand, Advanced Micro Devices (NASDAQ: AMD) reported robust Q2 results, with revenues surpassing expectations. AMD's performance was driven by its Data Center EPYC CPUs and Instinct AI-Accelerator GPUs, leading to a year-over-year revenue increase.
Overall, these developments highlight the dynamic nature of the tech industry, with AI advancements playing a key role in investor decisions.
InvestingPro Insights:
- AMD's market capitalization of $214.45 billion underscores its presence in the semiconductor industry.
- Despite a high P/E ratio, AMD's revenue growth remains positive, with expectations for net income growth.
- Analysts revising their earnings downwards may indicate caution, but AMD's financial resilience and market position are strong.
For investors seeking more information on AMD's financial health and market position, InvestingPro Tips offer in-depth analysis on various aspects of the company. With 15 tips available, investors can access detailed financial metrics and expert insights to make informed decisions.