Nvidia underperforms peers as report sparks rack delay worries

Investing.com -- NVIDIA Corporation (NASDAQ: NVDA) shares ticked up just 0.8% on Monday, starkly trailing a 3.2% surge in the Philadelphia Semiconductor Index and lagging rivals Advanced Micro Devices Inc (NASDAQ: AMD), which gained 7.7%, and Broadcom Inc (NASDAQ: AVGO), which jumped 4.4%. The underperformance came as a broad rally for chipmakers collided with a boutique research report alleging significant delays in the AI giant’s next-generation server architectures.

Supply chain research firm SemiAnalysis claimed in a weekend report that Nvidia’s highly anticipated Kyber NVL144 rack architecture will be delayed to 2028 due to manufacturing challenges with its PCB midplane. An Nvidia spokesperson swiftly refuted such claims in a brief statement emailed to Investing.com, stating: "Our roadmap is intact."

The research firm further alleged that Nvidia cancelled an alternative back-to-back rack design following heavy operational pushback from hyperscale cloud clients. Additionally, the report pointed to a downsized version of the upcoming Rubin Ultra platform, claiming a crucial four-die configuration had been scrapped.

The negative headlines triggered a sharp overnight selloff among Asian tech suppliers, which stumbled on the report as investors locked in profits following massive year-to-date run-ups. Japan’s Ibiden Co., a PCB maker that counts Nvidia as its largest client, dropped 8.4% by close, while Hong Kong-listed Kingboard Laminates Holdings Ltd. tumbled 12.6% and South Korea’s Samsung Electro-Mechanics Co. slid 8.1%.

According to analysts cited by Bloomberg, these rumored technical setbacks could severely cap the scale-up capacity of Nvidia’s future hardware. This perceived vulnerability may create a wider competitive window for alternative AI platforms, specifically AMD’s MI500X and Broadcom-backed custom TPUs.

Mizuho analyst Jordan Klein dismissed such fears in his daily "Tech Bytes" note, calling the product delay stories "more noise." "I would not be worried about NVDA nor looking to sell the stock," Klein said.

The analyst additionally pointed to strong earnings last Friday from Hon Hai Precision Industry Co Ltd (TW:2317), one of Nvidia’s largest suppliers. Klein noted that Hon Hai management forecasted a continued acceleration in AI demand, which the analyst said was "a very good sign into the NVDA launch of their new Vera Rubin rack."

The lackluster session keeps the world’s most valuable public company squarely rangebound as investors navigate an increasingly jittery AI market. Just last week, erratic headlines regarding Meta Platforms’ AI spending ambitions sent tech stocks on a whipsaw ride, underscoring growing market anxiety in the AI trade.

Ultimately, the market’s outsized reaction to the unconfirmed supply chain friction reveals a fragile consensus among AI investors after a multi-year, historic run-up. With valuation multiples priced for perfection, even the slightest hint of a product roadmap stumble is enough to make traders pause, regardless of Nvidia’s official denials.

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