Nvidia Slips After The Opening Bell As Amazon Halts Superchip Orders
Artificial Intelligence (AI) chip giant, Nvidia has slipped today in the market following reports of Amazon halting orders on a previous model of the company’s “super chip.” In a new Financial Times report, Amazon Web Services explained that it has transitioned its earlier orders to the recent version of chips.
According to the report, the company’s Grace Hopper Superchip released last year will be replaced with new orders on the recent Grace Blackwell. In March, the US-based chipmaker unveiled a new iteration of chips, Grace Blackwell barely a year after delivery for Hopper began to customers.
Amazon noted that the window between both releases is small prompting the company’s decision. Nvidia has previously explained the new model will be twice as powerful to train large languages.
Nvidia Price Drops
Following the news, the high-flying Nvidia stock recorded a slight 1% decline today and exchanged hands at $945.03. This decline comes as investors anticipate the company’s Q1 2024 earnings on Wednesday following a blistering quarterly performance in the green zone.
Some traders say the report might stunt short-term flows to the company ahead of tomorrow’s earnings while others rally on the sharp rise of the asset year-on-year. Analysts at The Kobeissi Letter, a leading commentary on capital markets hailed the firm earnings and contribution to the S&P 500.
“The company also accounted for 11% of the entire S&P 500’s return over the last 12 months. In Q1 2024, Nvidia’s contribution to the S&P 500’s EPS growth is estimated to reach ~40%. Nvidia’s Q1 2024 EPS and revenue are projected to grow by 474% and 241%, respectively.”
Market Awaits Q1 Earnings
Market analysts are bullish ahead of the report following consistent inflows in the previous months. In the last 3 months, the asset is up 36.25% while monthly gains stand at 14.8%.
A recent report from FactSet shows analysts believe earnings per share surged to $5.22, a 474% rise while revenues spiked 241% to $24.5 billion. Nvidia’s year-to-date stock growth is above 87% becoming the third most valuable company worldwide. The company’s market cap stands at $2.3 trillion only behind Apple and Microsoft.
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