Nvidia Stock and Semiconductor Stocks Reacting to Recent News

Nvidia (NVDA) stock faced uncertainty on Tuesday following reports that major customer Amazon.com (AMZN) had paused orders of Nvidia’s current data center processors in anticipation of a more powerful model later this year. This news sent ripples through the semiconductor industry, impacting stocks like Lam Research (LRCX), Qualcomm (QCOM), and Taiwan Semiconductor Manufacturing (TSM).

The Financial Times revealed that Amazon Web Services, the cloud computing arm of Amazon, had swapped its orders for Nvidia’s Grace Hopper superchip with the upcoming Grace Blackwell model. While this move was initially seen as a halt in orders, AWS clarified that it was part of a transition for their Project Ceiba, a joint effort with Nvidia to build a cloud-based AI supercomputer.

Investors expressed concerns about a potential sales slowdown before the launch of Nvidia’s more advanced Blackwell series chips. Amazon’s reported pause in chip purchases seemed to validate these worries, as cloud service providers like Amazon have been significant buyers of Nvidia chips to support their AI initiatives.

Despite the uncertainty, Nvidia stock managed to end the day with a 0.6% gain, closing at 953.86. The company is set to release its fiscal first-quarter results later this week.

In related news, Lam Research saw a boost in its stock price after announcing a stock split and a $10 billion share repurchase program. Qualcomm and TSMC were also highlighted as potential winners in the AI PC market, with Qualcomm receiving a price target increase from analysts and TSMC being touted as a prime investment opportunity for the AI PC trend.

Overall, Nvidia remains a leader in the fabless chipmaker industry group, with Qualcomm and TSMC also holding strong positions in their respective sectors. Investors will be closely watching these companies as they navigate the rapidly evolving semiconductor landscape.