Nvidia (NASDAQ:NVDA)'s stock has seen a 15% decrease from its recent all-time high, a slide that includes a 2% pre-open drop on Tuesday. This downward trend is being linked to comments made by a major client, Microsoft (NASDAQ:MSFT), regarding its chip supply situation.
In a podcast on Friday, Microsoft CEO Satya Nadella addressed the company's supply situation. He stated, “I am power, yes. I am not chip supply constrained. We were definitely constrained in 24. What we have told the street is that's why we are optimistic about sort of the first half of 25.”
This statement indicates that Microsoft no longer faces chip supply constraints, a condition that had been an issue for the company in 2024. The company's outlook for the first half of 2025 is optimistic due to this change in circumstances.
This outlook from Microsoft contrasts with the position of AI chip supplier Nvidia. The company has previously stated that they expect demand for their Blackwell chips to exceed supply for several quarters into 2025. This projection from Nvidia suggests a continued strong demand for their products, even as one of their top customers, Microsoft, indicates a lessening need for chip supply.
