Nvidia reveals highly anticipated Blackwell chip lineup at GTC, but stock dips

By Emily Bary

New chip architecture promises big performance boost, but shares move lower in possible sell-the-news reaction

Nvidia Corp.'s most hyped debut yet - its long-awaited next chip - was revealed at its annual conference on Monday.

Chief Executive Jensen Huang revealed Nvidia's (NVDA) new Blackwell chip architecture during the keynote address of the company's GTC event, promising serious performance benefits relative to prior-generation models.

For instance, the company's GB200 NVL rack-scale system with 36 Grace Blackwell Superchips offers a performance increase of up to 30 times when compared with the same number of H100 Tensor Core graphics-processing units for inference uses. That system also lowers costs and energy consumption by up to 25 times, Nvidia said in a statement.

There was high anticipation coming into Nvidia's keynote address, and the company had been expected to roll out the Blackwell line. Shares fell 1.8% in after-hours action in a possible sell-the-news reaction.

Read: Nvidia's stock could hit $1,200, this bull says. Here's the key to that rally.

The Blackwell architecture, which is named for mathematician David Harold Blackwell, replaces the Hopper architecture that Nvidia rolled out two years ago.

The company says it expects Amazon.com Inc. (AMZN), Dell Technologies Inc. (DELL), Alphabet Inc.'s (GOOG) (GOOGL) Google, Meta Platforms Inc. (META), Microsoft Corp. (MSFT), OpenAI, Oracle Corp. (ORCL) and Tesla Inc. (TSLA) to be among adopters of the Blackwell line.

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"We are committed to offering our customers the most advanced infrastructure to power their AI workloads," Microsoft CEO Satya Nadella said in a statement. "By bringing the GB200 Grace Blackwell processor to our data centers globally, we are building on our long-standing history of optimizing Nvidia GPUs for our cloud, as we make the promise of AI real for organizations everywhere."

Amazon's AWS announced that it planned to offer the GB200 Grace Blackwell Superchip and B100 Tensor Core GPUs for customers looking to advanced generative AI capabilities.

Cisco Systems Inc. (CSCO), Dell, Hewlett Packard Enterprise Co. (HPE), Lenovo Group Ltd. (HK:992) and Super Micro Computer Inc. (SMCI) also plan to deliver servers based on Blackwell's lineup, Nvidia added.

Nvidia also mentioned that its Omniverse enterprise digital twins are coming to Apple Inc.'s (AAPL) Vision Pro virtual-reality headset. Huang called Omniverse "the operating system of the robotics world," and Nvidia's demo showed off a digital twin of a car.

"Spatial computing will redefine how designers and developers build captivating digital content, driving a new era of creativity and engagement," said Mike Rockwell, Apple's vice president of its vision products group, in a statement.

Meanwhile, shares of Cadence Design Systems Inc. (CDNS) were seeing a more than 2% bump in the aftermarket, as the company announced its digital-twin design program was integrated with Nvidia's Omniverse. The electronic-design automation company also said it was collaborating on projects meant to advance drug discovery.

See also: Nvidia dives deeper into AI drug development with Amgen, Recursion partnerships (from January 2024)

The announcements come as Nvidia has seen surging interest from the investment community thanks to the company's role in powering the artificial-intelligence revolution. Shares are up about 240% since Huang delivered his GTC keynote a year ago, and they're up almost 80% to start the year.

GTC seems a bigger affair this year, with BofA Securities analyst Vivek Arya dubbing it "AI Woodstock" in a note to clients last week.

Read: Why Nvidia's explosive stock gains aren't over yet, according to BofA

Huang nodded to that idea as he opened his keynote by reminding attendees that "this is not a concert," but rather a developer conference that would feature science, math and algorithms.

-Emily Bary

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03-18-24 2046ET

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