Nvidia Faces Challenges Amid Growing AI Demand

Nvidia Corp NVDA is a leader in the AI revolution, but recent supplier delays and concerning technical signals have raised eyebrows among analysts.

Analyst Beth Kindig, known for her optimistic outlook on Nvidia, has recently expressed concern after evaluating comments from suppliers.

The main takeaway? The rollout of the GB200 may not go as smoothly as anticipated, and NVDA stock could be impacted.

Supplier Concerns: Delays Accumulate

Super Micro Computer Inc SMCI, an important Nvidia partner, has lowered its fiscal 2025 revenue forecast, citing delays with the Blackwell GPU. Their CEO, Charles Liang, initially projected that 30% of racks would utilize direct liquid cooling (DLC) by mid-2025, but this target has now been shifted to early 2026.

Adding to the concerns, SMCI stated it cannot ship Blackwell NVL systems in significant volumes for the March quarter, raising alarms about Nvidia’s short-term growth.

Vertiv Holdings Inc VRT, another company in Nvidia’s ecosystem, reported solid results for the fourth quarter but provided a lackluster forecast for first quarter growth, attributing this to “timing differences” in AI shipments. Furthermore, suppliers for PCIe 6.0 and PMIC now anticipate volume shipments will only happen in the latter half of the year.

Semtech SMTC has also pulled its guidance on active copper cabling, reinforcing concerns about the challenges ahead.

Read Also: AMD Reshapes Strategy, Plans $4 Billion Data Center Asset Sale While Doubling Down on GPUs

Technical Signals Suggest Momentum is Slowing

Chart created using Benzinga Pro

Nvidia’s stock has lost some momentum this year, down 2.83%. Despite an impressive 69.93% increase over the past year, the stock is now hovering near its 50-day moving average, a critical indicator for investors.

Trading volume has decreased, with the relative strength index (RSI) around 50, suggesting diminished buying enthusiasm. A drop below $110 could lead to a further decline toward the $100 psychological support level, which aligns with Kindig’s view of a potential buying opportunity if the stock continues to fall.

Upcoming Earnings: An Opportunity or a Dilemma?

Nvidia is set to report its fourth-quarter earnings after the market closes on Wednesday, presenting a pivotal moment for the company.

If management acknowledges the ongoing supplier delays, the stock could face additional pressure. However, performance from the Hopper and B200 systems may provide counterbalance to the Blackwell setbacks.

Investors should prepare for potential volatility ahead. While Nvidia’s leadership in AI remains strong, the challenges facing the company may pose hurdles that could alter their path in the marketplace.

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