Nvidia CEO on the next generation of semiconductors and computers

Nvidia Shares fell 2% on Tuesday morning after the company unveiled its latest generation of artificial intelligence chips called Blackwell.

CEO Jensen Huang announced the new chips on Monday at Nvidia’s developer conference in San Jose, California, touting them as an even more powerful processor than the current generation of Hopper graphics processors that are in high demand for powering large AI models. The first Blackwell chip is the GB200 and will be delivered later this year.

“We had to invent new technology to make this possible,” Huang said, holding up one of the new chips during an interview with CNBC’s “Squawk on the Street” on Tuesday. He estimated that a chip could cost $30,000 to $40,000 and that the research and development budget for the processor was around $10 billion.

The company also announced Monday a new enterprise software product called Nvidia Inference Microservice that makes it easier to run older generations of Nvidia GPUs.

“Leave Taylor Swift behind, you’re not the only one who can sell out a stadium as Jensen delivered his GTC keynote to a packed audience at the SAP Center in San Jose,” Bernstein analysts wrote in an investor note on Tuesday claimed an outperform rating and price target of $1,000 for the stock.

Wells Fargo analysts responded to the chipmaker’s announcement with cautious optimism, reiterating their overweight on Nvidia shares and increasing their price target to $970 from $840.

“While NVDA has reiterated its full stack/platform differentiation, we believe some expected a little more from the launch of the Blackwell B200,” the analysts wrote in a note.

Still, Wells Fargo analysts wrote that the news reinforces their “long-standing positive thesis” about Nvidia’s technology and monetization capabilities.

Goldman Sachs analysts, who maintain a “buy” rating on Nvidia shares, raised their price target to $1,000 from $875 on Tuesday, bringing “renewed appreciation” for Nvidia’s innovation to customers after the company’s keynote – and partner relationships and central role in the field of generative AI.

“Based on our recent industry discussions, we expect Blackwell to be the fastest-growing product in Nvidia’s history,” the analysts wrote in a note to investors. “Nvidia has played (and will continue to play) a critical role in democratizing AI across many industries.”

—CNBC’s Michael Bloom contributed to this report.

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