With Blackwell chips delayed, should investors delay buying Nvidia stock?

Although there was a lot of excitement surrounding the release Nvidiahis (NVDA 1.40%) latest chips based on its new Blackwell architecture, both customers and investors will apparently have to wait a little longer. According to reports, the delivery of the chips will be delayed, although by how long remains to be seen.

Given the strong demand that was expected for the tokens, let’s take a closer look at the issue and the impact it may have on the stock.

Design flaw

As first reported by tech publication website The Information, a design flaw in the Blackwell B200 chip was found “unusually late” in the manufacturing process. The problem is believed to stem from the fact that the company was one of the first to use it Taiwanese semiconductor manufacturerthe new CoWoS-L (“Chip on Wafer on Substrate with a Local silicon interconnect,” if you’re curious) packaging technology, and the placement of bridge dies connecting two graphics processing units (GPUs) being less than perfect.

As a result, Nvidia has apparently decided to revamp the design of its Blackwell GPUs, which is expected to delay the start of shipments by three months or more, according to reports. Customers and partners indirectly confirmed the delays. Meta platforms says it doesn’t expect to receive Blackwell GPUs this year, while Super Micro Computer executives say they don’t expect any real volume from Blackwell until the March quarter.

Alphabet, Microsoftand Meta all have huge Blackwell orders worth “tens of billions of dollars” they’re looking to fill, according to The Information. Meanwhile, it was reported earlier this year that Amazon is moving its Nvidia AI accelerator controls from Hopper to Blackwell.

While the Hopper orders will likely help fill some of the gap resulting from Blackwell’s delay, the risk is that there will be an air pocket if these customers are only waiting for the large orders.

UBS analysts, however, said that after speaking with Nvidia customers, the firm expects the chip delay to be between four and six weeks, and that the delay will be “invisible” to most customers. That’s much shorter than the initial delay that was reported, which helped lift the stock off recent lows.

Image source: Getty Images.

Is It Time to Buy Nvidia Stock?

The length of the delay for Blackwell will likely have a big impact on Nvidia in the short term. A short delay is likely to be good for the stock, with almost no impact on its 2025 results, while a delay of three months or more would be viewed unfavorably, especially after the idea of ​​a shorter delay has already been presented by a Wall Street analyst. .

There’s also the question of whether the design flaw could cause the chip to fail, or whether it just led to lower-than-expected production yields. In any case, it looks like the company’s decision to delay production of the chip and fix any issues is a smart move.

Longer term, the bigger question surrounding the chip issues is whether Nvidia accelerated its development timeline too quickly. The company has reduced its planned development cycle for new chip architectures from two years to one. That should keep demand and prices high, but it’s also an aggressive schedule with limited room for error or delay. Being at the forefront of new technologies and delivering mass production of your products are two separate things that may not always coincide in the future. So these are some risks to consider.

That said, with a number of customers who have absolutely huge orders for its chips, demand is not a problem for Nvidia. Customers are currently more concerned about falling behind in the artificial intelligence (AI) race than increasing capability. As large language models (LLMs) become more advanced, they will need more and more computing power, which means more GPUs will be needed. For example, Meta said that Llama 4 LLM will likely need 10 times the processing power of the previous version to train.

And right there is the biggest reason to own Nvidia. With a dominant market position in the GPU space, Nvidia will continue to be the biggest beneficiary of the continued push for more computing power.

At the same time, the stock is trading at a forward price-to-earnings (P/E) ratio of about 30 times based on analyst estimates in 2025. For a company with Nvidia’s long-term and growth prospects, that valuation is quite attractive.

NVDA PE Ratio data (Before 1y) by YCharts.

So while there are risks associated with Blackwell’s delay, long-term investors may still look to buy Nvidia at current levels.