The recent news that Amazon had halted orders for NVIDIA’s most advanced chip, the “Grace Hopper,” ahead of its earnings report caused a modest decline in NVDA stock. However, it was later clarified that Amazon did not actually stop orders for the chip, contrary to previous reports from the Financial Times. Instead, Amazon’s pause in orders was related to a transition from the Hopper chip to Nvidia’s latest Blackwell processor for the Ceiba Project, a joint supercomputer development project.
While this clarification may bring relief to investors, there are still concerns about potential disruptions in the demand trajectory for NVIDIA’s products. Morgan Stanley analysts warned of a possible “air pocket” in the product cycle as other companies may delay orders for the Hopper chip in anticipation of the Blackwell processor. The market remains cautious about the future prospects of NVDA stock, despite the company’s strong results and its strong position in key technological sectors like artificial intelligence (AI).
Supporters of NVDA stock believe in the potential of AI to drive productivity and innovation, making NVIDIA’s processors valuable assets. AI also has significant implications for industries beyond the tech sector, such as energy and power. However, despite the positive outlook, some experts caution against investing in NVDA stock at this time. Ross Givens of Traders Agency warned that the current risks associated with NVIDIA may outweigh potential rewards, particularly as competitors may be waiting for newer iterations of NVIDIA’s chips.
Overall, while the clarification from Amazon regarding its orders for NVIDIA’s chips may have eased immediate concerns, there are still uncertainties surrounding the company’s future. The market continues to watch closely for any developments that may impact NVIDIA’s performance and stock value. Investors are advised to carefully consider the potential risks and rewards before making any decisions regarding NVDA stock.
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https://investorplace.com/2024/05/nvda-stock-amazon-denies-reports-of-halted-orders-for-nvidia-superchips/