Nvidia Unveils Blackwell AI Chips, Shares Rise

Stock Market03/19/2024Mr. SmithMr. Smith
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Nvidia shares rebounded on Tuesday afternoon, gaining about 1% after the company introduced its latest generation of artificial intelligence chips called Blackwell.

Earlier in the day, shares had dipped by about 2%.

CEO Jensen Huang revealed the new chips on Monday at Nvidia’s developers conference in San Jose, California, describing them as more powerful processors than the current generation of Hopper graphics processing units, which are in high demand for running large AI models. The initial Blackwell chip, the GB200, is set to ship later this year.

“We had to invent some new technology to make it possible,” said Huang, showcasing one of the new chips during an interview with CNBC’s “Squawk on the Street” on Tuesday. He estimated that one chip could cost between $30,000 to $40,000 and noted that the R&D budget for the processor totaled around $10 billion.

On Monday, the company also unveiled a new enterprise software product called Nvidia Inference Microservice, designed to facilitate the operation of older generations of Nvidia GPUs.

“Move over Taylor Swift, you’re not the only one that can sell out a stadium as Jensen presented his GTC keynote to a packed crowd at the SAP Center in San Jose,” remarked Bernstein analysts in an investor note on Tuesday, maintaining an outperform rating and a $1,000 price target on the stock.

Wells Fargo analysts responded to the chipmaker’s announcement with cautious optimism, reiterating their overweight rating on Nvidia shares while increasing their price target to $970 from $840.

“While NVDA once again highlighted its full stack / platform differentiation, we think some may have anticipated a bit more out of the Blackwell B200 launch,” noted the analysts.

Nevertheless, the Wells Fargo analysts reaffirmed their “long-standing positive thesis” on Nvidia’s technology and revenue-generating prospects.

Goldman Sachs analysts, maintaining a buy rating on Nvidia stock, raised their price target to $1,000 from $875 on Tuesday and expressed “renewed appreciation” for Nvidia’s innovation, customer and partner relationships, and pivotal role in the generative AI space post the company’s keynote.

“Based on our recent industry conversations, we expect Blackwell to be the fastest ramping product in Nvidia’s history,” the analysts added in a note to investors. “Nvidia has played (and will continue to play) an instrumental role in democratizing AI across many industry verticals.”

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