Investing Strategy: Nvidia (NVDA) Stock under Pressure from Blackwell Heating Problems

Blackwell Overheating Issues Impacting Nvidia Stock

Nvidia’s (NASDAQ: NVDA) prospects are in jeopardy as Blackwell chip overheating issues arise, capturing finance professionals' attention ahead of the 2024 Q3 earnings report.

Nvidia's Stock Performance

Current reports indicate that the Blackwell chips are encountering significant overheating issues within server configurations set for up to 72 chips. Investor concern is growing over potential delays in launching new data centers. This situation comes at a time of increased demand for these chips, which many view as a significant revenue opportunity for Nvidia.

Market Response to Overheating Concerns

• Nvidia stock has seen a dip over 2% in premarket trading, shifting below the critical $140 threshold, currently trading at $138.70.
• Weakness in NVDA shares has extended from the previous trading session, indicating potential volatility in stock valuation.
• Wall Street analysts had previously boosted NVDA price targets based on anticipated Blackwell chip contributions to the AI sector boom.

Future Outlook for NVDA Shares

If the overheating issues are resolved efficiently, Nvidia may sustain its stronghold in the AI space, potentially elevating share values to a range between $200 and $250. Conversely, ongoing problems could hinder investor sentiment and push stock prices down between $100 and $140.

Impact of Upcoming Earnings Report

Investors are eagerly awaiting Nvidia's Q3 earnings call on November 20. Expectations are high for an upbeat report showcasing significant year-over-year growth despite the Blackwell challenges.

• Analysts predict earnings of $0.75 per share with revenues of approximately $33.09 billion, marking over 80% growth.
• The earnings call may provide strategic insights that could influence NVDA stock trajectory moving forward.