Nvidia Stock Drops. Oracle Has Eyes for Another.

Nvidia chips are the favored choice for training artificial-intelligence models. (Dreamstime)

Key Points

• Nvidia shares fell Tuesday as Oracle announced a partnership with AMD for AI superclusters.
• AMD will deploy 50,000 Instinct MI450 processors starting in the third quarter of 2026, intensifying AI chip competition.
• Nvidia introduced the DGX Spark, a compact AI supercomputer, enabling local development of AI agents.

Nvidia fell Tuesday as investors weighed competition in artificial-intelligence chips.

Nvidia shares were down 4.4% to $180.03 at the close. The stock rose 2.8% on Monday.

The fall comes as cloud-computing company Oracle said Tuesday that it would be a launch partner for the first publicly available AI “supercluster” powered by Advanced Micro Devices’ new-generation Instinct MI450 processors. The pair will deploy 50,000 chips starting in the third quarter of 2026.

That could provoke concerns AMD is set to take more of the AI chip market from current leader Nvidia. AMD’s coming MI400 series—which includes the MI450 chip—will be the company’s first rack-scale, 72-processor AI server offering. That could make it a more serious rival to Nvidia’s chips.

AMD shares were up 0.8%. Among other chip makers, Broadcom was down 3.5%.

Broadcom gained nearly 10% the previous day after announcing it was joining with ChatGPT-developer OpenAI to develop and deploy 10 gigawatts of custom AI accelerators.

That would match a similar deal reached between Nvidia and OpenAI last month. Nvidia agreed to supply 10 gigawatts of AI infrastructure to OpenAI, and said it would invest up to $100 billion in the AI start-up.

“This appetite for compute should drive others to drive higher capex spending forecasts since they need to compete too—so other Broadcom customers like Meta and Google are likely to spend more than expected,” wrote Melius Research analyst Ben Reitzes in a research note. “If you don’t have the compute, you don’t have a chance. To that end, Broadcom, Nvidia and AMD can all win.”

Meanwhile, Nvidia said late Monday it would start shipping the DGX Spark, which it calls the “world’s smallest AI supercomputer” and said it would allow developers to create AI agents—programs that have the ability to take simple directions and complete multistep tasks—and run advanced software locally rather than via cloud computing.

Write to Adam Clark at adam.clark@barrons.com