- Nvidia stock fell nearly 3% as AI slowdown fears hit chipmakers.
- Bernstein says investors should buy weakness in Nvidia and Broadcom.
- SpaceX and open-source AI could support Nvidia chip demand.
Nvidia stock NVDA fell nearly 3% on Monday as concerns over the pace of artificial intelligence development triggered a selloff in AI-related equities.
The decline came after executives at major AI companies called for a slower approach to advancing increasingly capable models.
The broader market also weakened, with the S&P 500 falling 0.33%, the Nasdaq Composite declining 0.38% and the Dow Jones Industrial Average losing 0.12%.
The selloff has raised questions over whether investors should buy the dip in Nvidia, wait for further clarity or reduce their exposure to the chipmaker.
AI slowdown concerns weigh on Nvidia stock
Anthropic CEO Dario Amodei called for AI companies to slow the rate at which they advance model capabilities in a lengthy essay published on X on Saturday.
He cited growing concerns about the potential misuse of artificial intelligence.
OpenAI CEO Sam Altman and xAI chief Elon Musk said they agreed with Amodei’s proposal.
Altman also said OpenAI would not proceed with an initial public offering this year, citing safety concerns.
The comments have prompted investors to reassess the rapid expansion of AI development and the substantial spending that has supported demand for advanced computing infrastructure.
A slower pace of AI development could potentially reduce the need for heavy investment in the technology.
That would create a risk for chipmakers such as Nvidia, whose business has benefited from the expansion of AI infrastructure.
Bernstein analysts led by Stacy Rasgon said the developments could further depress sentiment across the semiconductor sector, which had already been recovering after falling roughly 19% from its June peak.
Bernstein says buy weakness in Nvidia
Despite the recent pressure, Bernstein reiterated its Outperform ratings on Nvidia and Broadcom and recommended buying weakness in both stocks.
The analysts argued that a slowdown in the pace of AI development does not necessarily mean a slowdown in spending.
They noted that Amodei had not called for a halt to AI training, but rather a shift from an extremely fast pace to a somewhat slower one.
Bernstein said such a pace could still represent significant growth for the industry. The firm also pointed to rising demand from AI inference and agentic applications.
The analysts noted that there is already insufficient computing capacity to meet demand for even existing AI models, suggesting that infrastructure requirements could remain substantial despite concerns over the pace of model development.
Anthropic’s own spending also provides context for the debate.
According to The Information, the company agreed to 14.8 gigawatts of computing capacity involving approximately $517 billion in commitments over the 11 months through August.
The Financial Times also reported that Anthropic expects a second consecutive quarter of adjusted operating profit, with inference gross margins exceeding 80% before distribution costs.
Nvidia’s broader AI strategy offers support
Nvidia has been seeking to reduce its dependence on a small number of major customers by supporting a wider AI ecosystem.
The company has invested in startups and backed open-source AI models, which users can download and modify.
Earlier this month, Nvidia agreed to acquire open-source AI development platform Hugging Face in a $12.9 billion deal, according to the report.
The chipmaker also has customers whose AI ambitions may continue regardless of calls for slower development.
Musk, for example, has said SpaceX is highly confident it will launch Nvidia-powered AI servers in space next year.
SpaceX has previously indicated that it plans to use Nvidia hardware for orbital data centres, potentially addressing some of the land and power constraints facing conventional facilities.
However, the economic viability of orbital data centres remains subject to skepticism.
