US Stock Market Rebounds As Nvidia Announces New Blackwell Chip
The market sentiment on Wall Street has turned bullish with the shares of chipmaker Nvidia making a rebound as investors await the conclusion of the Federal Reserve meeting on interest rate policy.
Nvidia (NVDA) shares closed the market on Tuesday with a 1% price gain. The S&P 500 index also rose by 0.56% while the Dow Jones Industrial Average gained by 0.58%.
Nvidia Gains after Announcing Plans on New ChipThe 1% gain in Nvidia's stock comes after the giant chipmaker announced that its highly-anticipated new AI processor will ship towards the end of the year.
The new flagship chip, known as the B200 Blackwell, will be priced between $30,000 and $40,000 according to Nvidia's CEO, Jensen Huang. While speaking to CNBC, Huang said the new chip will be used in large computing systems, with the price depending on the value they provide.
NVIDIA CEO ON BLACKWELL CHIP SAYS WILL COST AROUND $30,000 TO $40,000- CNBC INTERVIEW
- *Walter Bloomberg (@DeItaone) March 19, 2024
Analysts believe that the technology behind the Blackwell chip offers better performance compared to the current flagship chip, Hopper. Nvidia claims that the chip is 30 times faster in some functions compared to its predecessor.
Huang also predicts that companies with data centers will spend over $250 billion annually to upgrade their systems with better-performing computing components. With the market set to grow by as high as 25% annually, Nvidia is committed to meeting the growing demand.
Nvidia is also shifting its strategy to not only sell single chips but also complete systems. Which will increase revenues coming from data centers. Besides launching the new Blackwell chip, Nvidia is also working on releasing a new set of software tools. Which will assist developers in selling artificial intelligence models to firms using the technology.
Another issue that Nvidia is also addressing is alleviating the challenges that come with packaging chips. The chipmaker is partnering with TSMC, a contract chip manufacturer, to address the challenges that come with packaging chips. Which has affected the speed of shipments for its predecessor flagship AI processor.
Nvidia Outperforms Tech StocksAnalysts claim that Nvidia's stock has already priced in Blackwell's launch after outperforming other tech stocks. Nvidia has been one of the top performers over the past year. The chipmaker is currently the third-largest US Company after Microsoft and Apple.
Nvidia's gains follow the recent hype around artificial intelligence. The launch of OpenAI's ChatGPT chat model saw tech companies rush to join the AI bandwagon, increasing demand for chips.
Some companies that will use the new flagship chip by Nvidia include Google for its Gemini AI, OpenAI, Tesla, Microsoft, and Meta. With competitors launching new products, Nvidia might likely lose some of its market share. However, its market dominance will remain intact.
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