Recently, Nvidia announced its second-quarter earnings report. According to the disclosure, the company's revenue was 30 billion US dollars, a year-on-year increase of 122%. However, Nvidia also noted that manufacturing difficulties with new chips had led to lower margins in its reporting of strong quarterly sales and profits, and the company had set aside $908 million in provisions in the most recent quarter. As a result, its share price fell 6.4% on Thursday.

In the statement, the company acknowledged that the Blackwell architecture GPU has yield issues and needs to redesign part of the B200 processor design to improve yield, so the mass production of the next generation of Blackwell architecture GPUs will be delayed until the fourth quarter of 2024.

|Multiple factors have caused Nvidia's stock price to fluctuate downward

Nvidia's revenue forecast for the next quarter, the "last hope of the village" among tech stocks, fell short of the most optimistic expectations in the market, raising concerns among investors that its rapid growth momentum could wane.

According to the company's management's forecast, Nvidia's revenue in the third quarter will reach about $32.5 billion. Although the average forecast of market analysts was $31.9 billion, the most optimistic forecast even reached $37.9 billion.

The market's high expectations for Nvidia put a lot of pressure on the company. At present, Nvidia's weight in the S&P 500 index is second only to Apple, and it has an important impact on the U.S. stock market. Even before the earnings report, the options market had predicted that Nvidia's stock price could move close to 10% after the earnings release.

Nvidia did not elaborate on the specific reasons for the decline, but analysts and industry executives believe that the problem lies primarily in the complex manufacturing process caused by the design of the Blackwell chips.

The analysis shows that the sheer size of the Blackwell chip and its complex design make it more difficult to manufacture than ever before. A defect in any part can lead to the scrapping of the entire chip, which can affect yield and profits. In addition, differences in the coefficient of thermal expansion of different parts of the chip can cause the package to warp, which in turn can affect performance and reliability.

In order to improve yield, Nvidia has made adjustments to the Blackwell's design and plans to increase production as originally planned. However, analysts believe that even with TSMC's new chip connection technology, Blackwell's complexity and inherent issues with chip size remain a major obstacle to its mass production.

The demand for Nvidia's AI chips may exceed expectations

Some analysts believe that although Nvidia has consistently exceeded Wall Street's expectations in the past few quarters, most of its growth has come mainly from a few large customers. About 40% of Nvidia's revenue comes from large data center operators like Google, Meta and Microsoft. Although these tech companies increased their capex budgets during the quarter, the market is concerned that the number of data centers they are building may have exceeded current demand, which could trigger a bubble.

However, Silicon Valley's tech giants don't share this view. Companies including Microsoft, Amazon, Meta and Google's parent company Alphabet have all significantly increased capital spending in the first half of the year, mainly to invest in data centers and other AI infrastructure. The total investment in these companies has already reached $106 billion, and this is just the beginning. All of these giants said they would further increase their investments over the next 18 months.

As one of the main buyers of Nvidia's AI chips, Meta expects capital spending in 2024 to be between $37 billion and $40 billion, up from $28.1 billion in 2023, with most of that spending going to AI infrastructure. Meta CEO Mark Zuckerberg said: "I'd rather take some risks in advance to build capacity than wait until it's really needed." ”

Can NVIDIA's high growth momentum continue?

"At the end of each quarter, everybody nervously asks, 'How long can Nvidia's high growth continue?' Timothy Acury, a senior semiconductor analyst at UBS, said · Arcuri. The question now is not whether Nvidia's sales numbers will be strong, but whether next year's performance will peak and whether high growth will come to an abrupt halt. However, Akuri believes this growth will continue for some time.

Investment platform Hargreaves Lansdown analyst Matt · Britzman cautions against reading too much into the market's reaction, as investors tend to "exaggerate" the importance of a quarter's results, especially in the grand prospect of artificial intelligence. Instead, he said, companies like Microsoft, Tesla and Meta are all planning for the long term, and investors should maintain the same long-term perspective.

Daniel, Senior Equity Analyst at Wedbush In an interview with National Business Daily, Ives remained optimistic about Nvidia's prospects. He believes that NVIDIA's strong performance and growing demand for AI chips show that the AI revolution is in a new phase of growth. "As interest in AI technology continues to grow, NVIDIA's leadership in global technology will be further strengthened, and future performance remains to be expected."