Nvidia stock sinks on reports of Blackwell AI server problems ahead of earnings

Nvidia (NVDA) stock fell as much as 3% early Monday following a new report from The Information, which highlighted overheating issues with its latest Blackwell AI servers.

The news comes ahead of the AI ​​maker’s earnings report, which is scheduled for release after the market closes on Wednesday.

This news is not the first to be reported about the products of this Blackwell company. In August, Information reported that the leading AI chip maker was dealing with design flaws related to the Blackwell chips themselves.

Nvidia confirmed fears that Blackwell production would be delayed in its earnings report in late August, saying chip production would increase in the December quarter, rather than its previously stated target of a rise in the September period. The company has not publicly confirmed any design flaws or overheating issues, and Nvidia did not immediately respond to Yahoo Finance’s request for comment on Monday.

Those Blackwell chips are slated to bring in “several billion dollars” in sales in the fourth quarter, according to CEO Jensen Huang. Customers looking to use the 72-chip rack include Meta (META), Microsoft (MSFT), and Elon Musk’s xAI, according to The Information.

As Dan Howley of Yahoo Finance noted last week, even a stellar report and outlook from a company can send its stock down. Nvidia raised expectations across the board in its latest quarter, for example, but shares still fell 6% immediately after announcing its results.

Investors’ excitement about the use of AI has also fueled fears that Big Tech’s AI use will slow down — or slow down — and blow AI chip companies in the gut.

Such fears were on display last Friday, when chip stocks fell across the board after a disappointing earnings report from Applied Materials ( AMAT ), which makes technology used by TSMC ( TSM ) to make advanced computing chips similar to Nvidia’s.

Shares of Nvidia closed Friday down 3.3%, while the PHHLX Semiconductor Index (^SOX) fell 3.4%.

Still, Nvidia shares are up nearly 186% since last year. The chip maker’s massive rise has overtaken Apple (AAPL) as the world’s most valuable company, and Nvidia recently replaced Intel on the Dow.

Laura Bratton is a reporter for Yahoo Finance. Follow her on X @LauraBratton5.

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