Nvidia news: stock is slowing down

Nvidia Stock Sinks as Microsoft Reveals Partnership with AMD

On Friday, Nvidia Corp.’s shares slid after Microsoft collaborated with AMD to navigate the advanced artificial intelligence (AI) chip shortage.

The Silicon Valley-headquartered company’s stock shed -1.98% to $924.79 per share on May 17, marking a two-day losing streak. Nevertheless, it lifted 0.10% after hours, with analysts predicting a 2.42% recovery to $947.13 apiece in the coming market session.

Nonetheless, Nvidia gained 86.74% year-to-date and 206.45% year-over-year, placing it among the top winners of the GenAI arms race. According to the market consensus, the semiconductor manufacturer will report 400.00% annualized earnings growth and a 242.00% revenue increase.

Furthermore, market experts anticipate second-quarter earnings and revenue to expand by 120.00% and 100.00%, respectively. This outpaces the projected 26.00% growth in the global AI chip market to $67.10 billion in 2024 from $53.40 billion in 2023.

Under the arrangement, Azure cloud users can choose Nvidia, AMD, or Microsoft Maia chips to operate their AI workloads. Previously, clients of the cloud computing service could only use NVDA semiconductors, but the supply could not keep up with the growing user count.

Moreover, the Washington-based conglomerate will unveil its new Cobalt 100 custom processors at the Microsoft Build Conference on May 21-23. With 120 Neoverse N2 cores and 12 DDR5 channels built upon Armv9 architecture, the chip is designed for cloud-native computing.

Microsoft Deal May Shake Nvidia’s AI Chip Monopoly

Industry watchers cautioned that the Microsoft-AMD agreement would sharply reduce Nvidia’s over 80.00% market share in the semiconductor chip market. They stressed that the GPU maker could only sell its products at exorbitant prices due to the lack of competition.

To address the supply shortage, major clients have begun supporting other major chipmakers to increase the global AI chip supply. AMD is the most notable beneficiary of this trend, scoring long-term deals with several advanced GPU users since last year.

Lastly, tech giants, including Microsoft, Alphabet, and Apple, ramped up their investments in developing in-house GPUS and high-end processors. However, tech specialists claim that such internal semiconductor mass production won’t be advanced enough to impact Nvidia until next year.

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