Actions of Nvidia (NASDAQ: NVDA) The stock jumped Tuesday, jumping as much as 6.2%. As of 1:33 p.m. ET, the stock was still up 5.7%.
The catalyst that sent the chipmaker and artificial intelligence (AI) Higher-level reports from experts have indicated that the Blackwell AI processor delays are unlikely to be as severe as originally feared.
Billions at stake
Earlier this month, suggested reports Nvidia’s highly anticipated Blackwell B200 AI processor, scheduled to ship later this year, is being delivered up to three months late due to a design flaw, according to a report first published on The Information website.
With billions of dollars in potential sales of the next-generation AI processor at stake, investors were rightly concerned, sending the stock price lower following the report.
However, the situation may not be as bad as that. Analysts at UBS According to the analysts, Blackwell chip shipments are delayed by “four to six weeks at most, which would put them at the very end of January 2025.” Demand remains strong and will likely be met by Nvidia’s H200 processor during this shorter time frame, the analyst wrote in a note to clients. UBS went on to suggest that research labs and enterprise clients continue to invest heavily in AI, “both bullish indicators.”
A long road ahead
It’s important for Nvidia investors to keep in mind that the company’s growth—especially when it comes to AI—will come in fits and starts. Additionally, a look at Nvidia’s stock chart reveals an important lesson. While the stock has gained 24,000% over the past decade, it has seen plenty of 50% declines. or more.
Investors who have been able to weather the occasional, wrenching volatility that comes with owning this high-growth stock have been handsomely rewarded. And you have to ignore the day-to-day machinations of the stock market to reap those rewards.
Nvidia may seem expensive at 42 times forward earnings, but I’d say that’s a fair price to pay for a company generating triple-digit growth and in pole position in the AI revolution.
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Danny Vena has positions in Nvidia. The Motley Fool has…
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