NVIDIA shares (NVDA) fell as much as 3.4% on Monday before reducing its losses following a new Information report highlighting overheating problems with its latest Blackwell artificial intelligence servers.
The news also comes ahead of the AI chipmaker’s earnings report, which is scheduled for release after market close on Wednesday.
This isn’t the first time problems have been reported with the company’s Blackwell products. In August, The Information reported that the leading AI chip maker was manage design flaws related to the individual Blackwell chips themselves.
Nvidia has confirmed its fears that Blackwell production will be delayed in its results report at the end of Auguststating that chip production would increase in the December quarter rather than its previously stated target of increasing in the September period. The company has not publicly confirmed any design flaws or overheating issues.
Nvidia told Yahoo Finance about its latest AI servers: “Engineering iterations are normal and expected.” Nvidia’s GB200 NVL72 server system uses 72 Blackwell chips and 36 of its latest Grace processors. Nvidia said the servers are “the most advanced computers ever created.”
These Blackwell chips are expected to bring in “several billion dollars” in sales in the fourth quarter, according to CEO Jensen Huang. Customers interested in using the Blackwell server system include Meta (META), Microsoft (MSFT), and xAI from Elon Musk, according to The Information.
Despite the reported issues, Michael Dell, CEO of Dell Technologies, noted in a post on Following the news on Monday, Dell is shipping an unspecified number of Nvidia’s Blackwell servers as part of its PowerEdge system.
Nvidia shares closed down 1.3% at $140.15 on Monday.
As Yahoo Finance’s Dan Howley noted last week, even a stellar report and outlook from the company on Wednesday could send its shares lower. Nvidia beat expectations across the board in its most recent quarter, for example, but shares fell another 6% immediately after announcing its results.
Investor enthusiasm for AI spending has also fueled fears that big tech’s AI spending will decline — or decline sharply — by hitting AI chip companies in the gut.
Such fears were on display last Friday, when chip stocks fell across the board after a Applied Materials Disappointing Results Report (AMAT), which makes the technology used by TSMC (TSM) to make advanced computer chips such as those from Nvidia.
Nvidia shares closed Friday down 3.3%, while the PHLX Semiconductor index (^SOX) fell 3.4%.