(Reuters) – Concerns over a delay in the launch of Nvidia’s upcoming artificial intelligence chip may be overblown, analysts said, as they do not expect the setback to have a major impact on the chip giant’s revenue or demand.
According to media reports, Nvidia’s Blackwell chips could face delays of three months or more due to design flaws, potentially affecting customers such as Meta Platforms, Alphabet’s Google and Microsoft.
Despite recent concerns, “it remains clear that demand levels continue to rise, with all major hyperscalers continuing to grow their capex outlook,” Bernstein analyst Stacy Rasgon wrote in a note on Monday.
In the event of a delay, sales of Nvidia’s older “Grace Hopper” chips should help fill the gap, Rasgon added.
“Nvidia’s competitive window is so large right now that we don’t think a three-month delay will cause significant stock displacement.”
Nvidia, which controls more than 80% of the AI chip market, is in a unique position as both the biggest enabler and beneficiary of the increasing AI development.
Nvidia CEO Jensen Huang said in May that its latest Blackwell line of AI chips would ship in the second quarter.
The supply of in-demand AI chips has been limited as manufacturers such as Taiwan’s TSMC have struggled to catch up and expand capacity for complex technologies such as advanced packaging.
Nvidia CFO Colette Kress had said in May that demand for Blackwell chips could exceed supply “well into next year.”
While there are minor delays, analysts at TD Cowen said they were “confident that these issues are likely to be resolved either through firmware or platform updates”.
The delays do not reflect the demand that will drive data center revenue for Nvidia in 2025, they said.
An Nvidia spokesperson, in response to a media report last week, had said that “demand for containers is very strong, broad Blackwell sampling has begun and production is on track to ramp up in the second half of the year”.
(Reporting by Juby Babu in Mexico City; Editing by Shilpi Majumdar)