(Bloomberg) — Shares of Nvidia Corp. fell on Tuesday after Chief Executive Officer Jensen Huang failed to take the artificial intelligence chipmaker to new heights.
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The stock fell 6.2% to $140.14 in New York, marking its biggest one-day decline in four months. Although Nvidia’s latest announcements have given an encouraging view of the company’s long-term prospects, there hasn’t been as much of a near-term boom as some investors have called for. “Today’s announcements from Nvidia are important, but long overdue,” Stifel Financial Corp. said in a report.
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Huang took the stage to a packed arena in Las Vegas to kick off the CES trade show on Monday and introduced the new lineup, offering a vision of how AI will permeate the entire economy. The company wants its products to be the heart of a future tech world with one billion humanoid robots, 10 million automated factories, and 1.5 billion self-driving cars and trucks.
Interest in Nvidia’s products — and Huang’s predictions — has exploded as companies rush to deploy new AI computing gear. The CEO presented Nvidia’s products and strategy for more than 90 minutes to an audience of hundreds, including Toyota Motor Corp. and MediaTek Inc. including alliances with those that sent their shares above 3%.
Before Tuesday’s pullback, Nvidia’s stock had tripled in the past 12 months. Asian suppliers, including Taiwan Semiconductor Manufacturing Co. And Hon Hai Precision Industry Co. is also involved, adding to the optimism about Nvidia’s prospects.
Chief financial officer Colette Kress said at a separate event that the AI transformation will continue to evolve for the next 10 years. “It’s going to happen to us in the next decade and the last decade,” he said in a JPMorgan Chase & Co. interview on Tuesday coinciding with CES. Said during the chat. “We still have a lot of growth opportunities for us in the future.”
During Huang’s presentation on Monday, he also broke the news to his traditional audience: gamers. Nvidia is launching an update to its GeForce GPUs — short for graphics processing units — that were built with the same Blackwell design the company uses in its AI accelerators, Huang said.
The company said the new GeForce 50 series cards will take advantage of Blackwell’s capabilities to create even more realistic experiences for computer gamers. While traditional graphics chips create an image by calculating the shade of each pixel in the picture, the new technology will put more emphasis on AI to determine what the next frame should look like.
“GeForce allowed AI to reach the masses, and now AI is coming home to GeForce,” Huang said during the presentation.
The flagship RTX 5090 model will be available later this month for $1,999, with less powerful cards following. The RTX 5070, priced at $549, will debut in February with better performance than the previous range-topping model, the RTX 4090, Nvidia said.
As recently as 2022, gaming was Nvidia’s largest source of sales. Now the chipmaker’s data center operation is huge. It is set to contribute more than $100 billion this year, as the company’s accelerator chips are prized by the world’s biggest tech companies. The next step is to bring the hardware and software to a larger segment of businesses and government agencies, helping to diversify Nvidia’s revenue.
Huang announced that Toyota, the world’s largest automaker, is now a customer for Nvidia’s autonomous driving AI products and will use its drive chips and software. Toyota shares extended gains in Tokyo after the announcement.
Extending AI into the more physical world will transform $50 trillion industries, Nvidia said. But this move will also bring challenges. Robots and cars will need software that can safely handle real-life complexities. Huang said the company created Nvidia Cosmos to help make robots smarter and produce fully autonomous vehicles.
Cosmos technology is able to generate video from inputs such as text. That video then becomes the basis for virtual training, helping to reduce reliance on expensive and time-consuming real-world experiments. Produced video can be searched and honed to repeatedly investigate important but infrequent incidents — such as a car collision with an emergency vehicle.
Nvidia partners with Uber Technologies Inc. to develop self-driving technology Also working with The millions of trips that Uber handles daily will provide a wealth of data for training AI models.
Nvidia said mass-market carmakers are moving toward using one computer and operating system for their entire model lineup, rather than dividing systems by vehicle class. The company believes this change will set the table for wider use of the chip designer’s broader offerings. To speed this up, Nvidia has certified its products by government transportation safety organizations.
Nvidia is also now introducing a desktop PC called Project Digits. The company is equipping the tiny $3,000 device with a single Grace Blackwell Superchip — a combination of central processor and graphics semiconductor — working with a large chunk of memory and fast connectivity. The idea is to provide developers with hardware capable of running very large AI models, which current laptops would struggle to handle.
The new machines, developed in partnership with Taiwan’s MediaTek, will run a version of the Linux operating system and are not designed for everyday use. Instead, they’re meant to help AI developers work locally when either connecting to the cloud or using traditional computers isn’t practical or possible.
Nvidia chose MediaTek to help build the main chip for the Digit because of that company’s skills in making low-power semiconductors. The Taiwanese company will also offer products with the technology to other customers, Huang said.
Asked if the project numbers indicate that Nvidia wants to enter the PC market more broadly, Huang said the machine is aimed at AI developers and students. But he also pointed out that Nvidia has a big interest in the sector.
“Obviously, we have plans,” he said during a briefing with financial analysts. “I’ll have to wait to tell you about it.”
–With assistance from Ed Ludlow.
(Updates the shares starting in the second paragraph.)
