Nvidia Stock Sinks On Blackwell AI Chip Overheating Concerns

Nvidia (NVDA) stock fell Monday following a news report that the AI chipmaker is struggling with overheating issues with its next-generation Blackwell processors when installed in high-capacity server racks.

The Information reported Sunday that Nvidia has had to redesign server racks several times to overcome the overheating problems. Word of the repeated design changes has sparked concerns among customers about potential delays in installing the new AI data center technology, the report said.

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Nvidia’s Blackwell graphics processing units for AI and high-performance computing reportedly have overheated when used in servers with 72 processors inside. These machines can consume up to 120 kilowatts of electricity per rack.

In response to the delays and overheating issues, an Nvidia spokesperson told Reuters that the design changes are part of the normal development process and done in collaboration with cloud service providers.

In premarket trades on the stock market today, Nvidia stock dipped nearly 2% to 139.51.

“We had heard that server designs were still being finalized as of last month, but would be surprised if NVL72 shipments are meaningfully delayed by issues with heat (and cooling),” Wedbush Securities analyst Matt Bryson said in a client note Monday. “Having said this, it will be a topic we will be asking about at SC24 this week.”

SC24 is a conference on high-performance computing, networking, storage and analysis. It is taking place this week in Atlanta.

The Blackwell launch already was delayed by several months as Nvidia worked to correct a design flaw that impacted production yields, Tom’s Hardware reported.

Nvidia is due to report its fiscal third-quarter results late Wednesday.

Nvidia stock is on five IBD stock lists: Leaderboard, SwingTrader, IBD 50, Sector Leaders and Tech Leaders.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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