This Could Be Bad and Good News for Nvidia Stock

Nvidia (NVDA -1.78%) stock has been flying high for the past few years, buoyed by the company’s dominance in the artificial intelligence (AI) chip market. Its sales of chips and related products to AI customers have helped it report record earnings that have climbed in the triple digits. The company even launched a stock split back in June to lower its per-share price, a move to make it more easily accessible to a wider range of investors.

But, since the split, Nvidia’s stock has disappointed investors, falling more than 11%. Now some are wondering whether Nvidia has permanently lost its momentum — after all, the company is up against more and more competition in the AI chip market. On top of this, Nvidia may be facing delays in the release of its much-awaited Blackwell chip, according to a news report. The chip might be delayed by at least three months because of a design flaw, The Information reported.

If this is indeed the case, it may be bad news for Nvidia stock — but there could be some positive news in this story too. Let’s take a closer look at the situation and find out where Nvidia stock may be heading in the coming months.

Image source: Getty Images.

The importance of Blackwell

First, a quick summary of Nvidia’s path so far and the importance of Blackwell. Today, Nvidia sells the H100, a graphics processing unit (GPU) that plays a crucial role in many key AI tasks, such as the training and inferencing of models. The H100, using the Hopper architecture, is today’s top-performing chip, but Nvidia has something even more exciting on the horizon for AI customers: the Blackwell architecture and B200 AI chip. This technology could be a game-changer for those ramping up AI data centers, lowering cost and energy consumption and making gains in performance, security, and more.

In the most recent earnings report, Nvidia said Blackwell was in full production and the goals were production shipments to begin in the second quarter and data centers up and running in the fourth quarter. As a result, chief executive officer Jensen Huang said he expects “a lot” of revenue from the Blackwell platform this year.

This brings me to the latest news. Nvidia, this past week, told Microsoft and another major cloud customer about the delay, The Information reported, citing two people who help produce the chip. Reuters contacted Nvidia and received the following emailed response from a spokesperson: “As we’ve stated before, Hopper demand is very strong, broad Blackwell sampling has started, and production is on track to ramp in the second half.”

So, at this point, without a comment from Nvidia to confirm it, it’s not clear whether the B200 will be delayed. If it is, and if Blackwell revenue is slower to get going than planned, this could weigh on investor sentiment and the stock in the coming months. That’s the bad news for Nvidia and its shareholders.

Enormous demand for Nvidia chips

Now, here’s the good news. Microsoft, Alphabet, and Meta Platforms have ordered “tens of billions of dollars worth of the chips,” according to the article in The Information. This highlights the enormous demand for Nvidia’s latest GPUs. Even in an environment where rivals have launched other high-performing chips and these three market giants are making their own AI chips, they still rely on Nvidia in a major way. This is a key point to note because one of investors’ biggest concerns in recent times has been the idea that Nvidia could lose market share to competitors.

Of course, you now might wonder if a possible delay will send these customers running to the competition — at least for future chip needs. I don’t think so, and here’s why. Production delays and even product flaws aren’t unheard of in technology (or any other business). Unless this sort of thing happens repeatedly or if a company is unable to fix the problem, it’s unlikely this will hurt product demand.

Big AI customers are eager to get their hands on the world’s best chip — even if they have to wait a bit longer than expected for it.

All of this means that, if the Blackwell chip delay is true, Nvidia shares could suffer in the short term, but if Nvidia handles the problem in an efficient manner and customers are satisfied with the chip, this shouldn’t matter much over the long run. The good news is demand is strong for the company’s products — with the world’s biggest tech companies spending billions of dollars on them — and that could drive Nvidia’s earnings and the stock price significantly higher over time.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.