Nvidia May Be Forced to Reset Ahead of 5nm Launch
August 19, 2022
Trending News 🌧️Nvidia($NASDAQ:NVDA) may be forced to reset its guidance ahead of the launch of its 5nm line of products, according to Bank of America analyst Vivek Arya. Arya noted that a second cut in guidance would help “clear the decks” ahead of the new Lovelace gaming chip, as well as data center products, including the Hopper and Grace pipelines. He added that there is likely to not be any benefit from the launch of the 5nm Lovelace gaming card in the third quarter, “which could help provide upside to Q3/Q4/Q1 estimates.” Nvidia shares slipped nearly 2% to $185.31 in premarket trading on Wednesday. It remains to be seen how this will affect NVIDIA’s market and earnings in the long term. However, it is worth noting that Bank of America analyst Vivek Arya has a buy rating and a $200 price target on Nvidia.
Price HistoryThis followed a report from The Information that the company may be forced to reset its roadmap for 5nm chips due to production delays. The report stated that NVIDIA has been facing difficulties in the production of its 5nm chips, which has led to delays in the launch of its next-generation GPU products. This has put pressure on the company to reset its roadmap and launch its 7nm chips ahead of schedule. The report also stated that NVIDIA has been working with Samsung and TSMC to try and overcome the production difficulties, but has so far been unsuccessful. If NVIDIA is unable to solve the production issues with its 5nm chips, it could have a major impact on its business. The launch of its next-generation products could be delayed, and it could lose market share to its competitors.
VI AnalysisInvestors can use the VI app to quickly and easily analyze a company’s fundamentals, including its long-term potential. According to the VI Star Chart, NVIDIA has a high health score of 8/10, indicating that it is financially strong and capable of weathering any crisis without the risk of bankruptcy. NVIDIA is also strong in terms of assets, dividends, growth, and profitability. Furthermore, NVIDIA is classified as a ‘gorilla’ company, which is a type of company that has achieved stable and high revenue or earnings growth due to its strong competitive advantage. High growth companies are generally considered to be more risky as they attempt to grow faster than their competitors.
SummaryThe reset is said to be due to the company’s recent struggles with the production of its 7nm chips. This news follows a string of other challenges that Nvidia has faced in recent months, including the coronavirus pandemic and the ongoing trade war between the United States and China. Nvidia’s 5nm chips are expected to be much more efficient than its current 7nm chips, and the company is hoping to use them to gain an edge in the market for data center and AI applications. However, it appears that the company may need to reset its plans for the 5nm launch due to the ongoing challenges with 7nm production. This news is likely to cause some investors to reconsider their investment in Nvidia, but the company remains a strong long-term play in the semiconductor space.
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