Nvidia eases as investors look out for details on new AI chip

"The shows a significant performance uplift compared to Hopper (the current flagship chip) but it's always hard to live up to the hype," said David Wagner, portfolio manager at Aptus Capital Advisors, adding that investors were still digesting the nearly 80% year-to-date price surge.

Nvidia's stock hit a record high of $974 just seven sessions ago.

Along with the Blackwell chip, which combines two squares of silicon the size of the company's previous offering, Nvidia detailed a new set of software tools on Monday, to help developers sell artificial intelligence models more easily to firms that use Nvidia's technology.

The new flagship chip is expected to be used by Amazon.com, Alphabet's Google, Meta Platforms, Microsoft, OpenAI and Tesla.

Nvidia is also shifting from selling single chips to selling total systems.

Its hardware products will likely remain "best-of-breed" in the AI industry, Mornigstar analysts said, lifting their estimates for Nvidia data-center revenue for 2026 and 2028.

"We remain impressed with Nvidia's ability to elbow into additional hardware, software, and networking products and platforms," they said.

The software push shows how Nvidia, whose chips are mostly used to train large-language models like Google's Gemini, is trying to make its hardware easier to adapt for companies rushing to integrate generative AI into their businesses.

Several analysts have said the market for inference chips, which help AI models answer queries and produce images in response to user prompts, will ultimately be much bigger than the training chips market on which Nvidia has a tight hold.

Nvidia's market share is expected to drop several percentage points this year, as competitors launch new products and the company's largest customers make their own chips, although its dominance is expected to remain unchallenged.

The firm, which has cornered 80% of the AI chip market, is expected to provide more details on pricing at its presentation for financial analysts at 11:30 a.m. ET (1530 GMT) on Tuesday.

Blackwell is a "monster in the chip world", but it could take a bit of time to ascertain if it can deliver for Nvidia's bottom line in the way the current chip does, said Kathleen Brooks, research director at Polish .

Shares of other high-flying chipmakers also fell, with the Philadelphia chip index down about 1.3%.

Nvidia's forward price-to-earnings ratio, a commonly used metric to value stocks, stood at 34.6, below its three-year average of 42.