Nvidia Stock: Power-Chip Overheating Issue Triggers Sell Signal

Nvidia (NVDA) stock fell Monday after an analyst said the AI chipmaker is "experiencing severe thermal issues" with some power chips used in its latest server systems for artificial intelligence. TF International Securities analyst Ming-Chi Kuo said Nvidia is having problems with DrMOS chips from Alpha & Omega Semiconductor (AOSL). Nvidia is testing those chips with its Blackwell series GB300 and B300 systems.

Nvidia also is testing DrMOS chips from Monolithic Power Systems (MPWR). DrMOS, which stands for "Driver and MOSFET Module," is a voltage regulator that powers processors, motherboards and other electronics. "My latest supply chain survey indicates that AOS's chips were experiencing severe thermal issues," Kuo said in a report.

Nvidia had prioritized testing Alpha & Omega's power chips in part to "strengthen its bargaining power against MPS to lower costs," Kuo said. The issue threatens to delay mass production of Nvidia's GB300 and B300 systems, he said.

Nvidia Stock Triggers Sell Signal
In afternoon trades on the stock market today, Nvidia stock was down about 2% to 131.63. Earlier in the session, it was down as much as 2.9% to 130.42. With the decline, Nvidia stock dropped into the stop-loss sell zone of its recent breakout.

On Oct. 17, Nvidia stock hit a buy point of 140.76 out of a 17-week consolidation pattern, according to IBD MarketSurge charts. Based on IBD trading guidelines, the 7%-8% sell zone starts at 130.91.

Elsewhere on the stock market today, Alpha & Omega Semiconductor and Monolithic Power Systems diverged. In afternoon trading Monday, AOS stock dropped more than 6% to 42.40. MPS stock rose more than 4% to 634.01.

Meanwhile, Nvidia stock is on two IBD lists: and.

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The overheating issue with Nvidia's power chips raises concerns about the company's quality control and product reliability. While Nvidia has a strong brand and dominant position in AI chips, this incident could erode customer confidence and open the door for competitors like AMD and Broadcom to gain market share. However, Nvidia's robust management and enduring business model indicate that it is well-positioned to address the overheating issue and maintain its competitive edge in the long run.

Nvidia's competitors, AMD and Intel, are poised to capitalize on the overheating issue, as customers may seek alternative solutions. AMD's EPYC processors and Intel's Sapphire Rapids chips offer viable options for high-performance computing and AI workloads. With Nvidia's Blackwell chips facing delays, AMD and Intel could gain market share in the data center segment. However, Nvidia's strong brand and customer loyalty may limit the impact on its overall market dominance.

The overheating issue with Nvidia's power chips could have long-term effects on the company's reputation and brand image, potentially impacting investor confidence and customer loyalty. If not addressed promptly and effectively, this issue could erode Nvidia's brand image, making it more challenging to attract and retain customers. Moreover, a damaged reputation could lead to increased scrutiny from investors, potentially impacting the company's stock price and market valuation. To mitigate these risks, Nvidia must swiftly resolve the issue, communicate transparently with stakeholders, and demonstrate its commitment to product quality and customer satisfaction.



In conclusion, the overheating issue with Nvidia's power chips has triggered a sell signal for the company's stock. While Nvidia has a strong brand and dominant position in AI chips, this incident could erode customer confidence and open the door for competitors to gain market share. Nvidia must address the issue promptly and effectively to maintain its competitive edge and protect its reputation. Investors should closely monitor the situation and consider the potential long-term effects on the company's stock price and market valuation.