Nvidia shares slide after hitting a record following new AI chip debut

Nvidia’s shares slumped 6.2% on Tuesday after reaching a record high a day ago when the company unveiled a series of new AI chips to power its growth prospects. The decline was partially due to a broad-based selloff in technology stocks amid surging US government bond yields. 

Despite the drop, the AI powerhouse remained the top performer in the Magnificent Seven stocks, surging 185% year on year and more than 900% in the past two years. The chipmaker is the largest beneficiary of the artificial intelligence boom, with its revenue nearly five-folded in the past five quarters. Nvidia’s Data Centre sales, contributing nearly 90% of its total revenue, have repeatedly reached a record over the past eight quarters. 

Blackwell-backed GeForce RTX 50 series

At the Consumer Electronics Show (CES) in Las Vegas on Monday, CEO Jessen Huang unveiled the latest generation of graphics processors, the GeForce RTX 50 series, powered by Blackwell. Blackwell is the core product expected to accelerate Nvidia’s future growth, which started shipment in the last quarter of 2024.

However, the RTX 50 chips are particularly designed to improve gaming performance by boosting gaming frame rates. The RTX 50 series will be available preinstalled in computers priced between $550 (€531.10)and $2,000 (€1931.3).

This may be a little less impressive for investors. Gaming revenue only contributes 9% of its total revenue, according to its latest quarterly report. Before 2022, the gaming segment was the primary revenue source for Nvidia, especially driven by the pandemic’s stay-at-home effect. 

Desk-top sized supercomputer: “Project Digits”

Meanwhile, the chipmaker also announced Project Digits – “a personal AI supercomputer that provides AI researchers, data scientists and students worldwide with access to the power of the NVIDIA Grace Blackwell platform”. This marks a potential strategic move to expand Nvidia’s presence in the PC market. 

The Project Digits featured the new GB10 Grace Blackwell Superchip, a compact AI chip capable of running 200 billion parameter models. Traditionally, such high-performance chips require large-scale hardware, but Nvidia’s innovation delivers a desktop-sized solution system will be a pro option for developers to complete their jobs wherever they want.

This portability is expected to appeal to developers seeking flexibility in their work environments. The system will be available in May, with prices starting at $3,000 (€2896.9). MediaTek, a Taiwanese tech company that specialises in making power-efficient semiconductors, partners with Nvidia in the project.

“AI will be mainstream in every application for every industry. With Project DIGITS, the Grace Blackwell Superchip comes to millions of developers”, said Huang. “Placing an AI supercomputer on the desks of every data scientist, AI researcher and student empowers them to engage and shape the age of AI.” 

Diversification in the AI-powered technology world

Nvidia’s revenue surge over the past two years has been heavily reliant on hyperscaler customers, such as Amazon, Microsoft, and Alphabet, which together account for 50% of its revenue.

At the October quarter earnings call, CEO Jensen Huang highlighted that the AI industry is “large and diverse”. He previously mentioned Nvidia’s strategy to diversify its product offerings across a range of industries, including consumer internet, automotive, and healthcare, rather than focusing exclusively on cloud businesses.

At CES 2025, the company also emphasised its ambition to make its products broadly adopted in the future tech world, including robots and self-driving cars, and AI development tools. It has launched Nivida Cosmos, a computing platform that aids physical AI development in autonomous vehicles and robots. 

Josh Gibert, an analyst at eToro believes that Nvidia remains on the course of a robust growth trajectory. “He (Jensen Huang) laid out a very clear roadmap of what’s ahead, detailing new products and the AI vision ahead’, he said, adding that the company’s growth “doesn’t look to be slowing down and February’s results are likely to reflect that”.