Nvidia Customer Hits Pause. Lam Stock To Split. AI PCs To Drive Chip Sales.

Nvidia (NVDA) stock wavered Tuesday on a report that major customer Amazon.com (AMZN) had halted orders of Nvidia’s current data center processors to wait for a more powerful model later this year. Other semiconductor stocks moving on news Tuesday include Lam Research (LRCX), Qualcomm (QCOM) and Taiwan Semiconductor Manufacturing (TSM).


The Financial Times reported that Amazon’s cloud computing business, Amazon Web Services, has replaced its previous orders for Nvidia’s Grace Hopper superchip with its successor Grace Blackwell. Grace Hopper launched last August and Grace Blackwell is due out in the fourth quarter.

But AWS called the initial FT story “misleading” and “inaccurate” because the transition to Blackwell only applies to its Project Ceiba. That joint project between AWS and Nvidia aims to construct the world’s largest cloud-based AI supercomputer.

“To be clear, AWS did not ‘halt’ any orders from Nvidia,” an AWS spokesperson said in an email. “In our close collaboration with Nvidia, we jointly decided to move Project Ceiba from Hopper to Blackwell GPUs (graphics processing units), which offer a leap forward in performance.”

Investors have been worried about a possible “air pocket” in sales before the launch of Nvidia’s more capable Blackwell series chips, analysts say. Amazon’s reported pause in Nvidia chip purchases seemed to provide evidence of that. Cloud service providers like Amazon have been spending heavily on Nvidia chips to support their artificial intelligence initiatives.

Meanwhile, Nvidia plans to release its fiscal first-quarter results late Wednesday.

Nvidia Stock Wavers After News Report

On the stock market today, Nvidia stock alternated between modest gains and losses. However, it ended the day up 0.6% to 953.86.

Earlier in the regular session Tuesday, Nvidia stock had been down as much as 1.7% to 931.80.

Nvidia stock has been consolidating for the past 11 weeks at a buy point of 974, which is also its all-time high, according to IBD MarketSurge. Last week, Nvidia cleared an early-entry buy point, based on IBD analysis.

Lam Research Announces Stock Split, Share Buyback

Elsewhere among semiconductor stocks, Lam Research stock rose after the chip-gear supplier announced a 10-for-1 stock split and a $10 billion share repurchase authorization.

“The share repurchase authorization announced today will execute over an indeterminate period of time and is consistent with our plan to return 75% to 100% of free cash flow to stockholders in the form of dividends and share buybacks,” Chief Financial Officer Doug Bettinger said in a news release.

He added, “Furthermore, the stock split announced today will enable a larger proportion of Lam’s worldwide employee base to participate in the company’s employee stock plans.”

On Tuesday, Lam stock advanced 2.3% to close at 964. LRCX stock is in a flat base with a buy point of 1,007.39, according to MarketSurge charts.

Qualcomm, TSMC Called AI PC Winners

Wall Street analysts highlighted chipmakers Qualcomm and Taiwan Semiconductor, better known as TSMC, as beneficiaries of the AI PC trend.

On Monday, Microsoft (MSFT) and its hardware partners announced a lineup of Windows AI PCs running on Qualcomm processors. The Copilot+ PCs will launch on June 18 and start at $999.

Rosenblatt Securities analyst Kevin Cassidy reiterated his buy rating on Qualcomm stock and raised his price target to 240 from 200.

Qualcomm stock rose 1.6% to close at 200.85 on Tuesday. Earlier in the session, it notched a record high of 201.98.

“With support from Microsoft, we expect Qualcomm is on the cusp of leading Arm-based CPUs (central processing units) toward market share gains in the PC market,” Cassidy said in a client note on Monday.

He added, “We see Qualcomm as leading the market in delivering AI and Gen AI to network edge applications in smartphones, PCs, automobiles and IoT (Internet of Things) devices.”

Chip foundry TSMC makes Qualcomm’s semiconductors.

In a client note Tuesday, Mizuho Securities trading-desk analyst Jordan Klein said TSM stock might be “the best way to play” the coming wave of AI PCs and smartphones.

Nvidia Stock Leads Fabless Chipmaker Group

Nvidia stock ranks first out of 39 semiconductor stocks in IBD’s fabless chipmaker industry group, according to IBD Stock Checkup. Qualcomm ranks sixth in the group.

Meanwhile, Lam Research is No. 10 out of 26 stocks in IBD’s semiconductor equipment group.

And TSMC ranks first out of 26 stocks in IBD’s semiconductor manufacturers group.

Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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