NVIDIA (NVDA) Stock Drops as Reports Surface of RTX 50 GPU Production Cuts

NVIDIA's stock took a hit today. The reason? Whispers from the supply chain suggest the tech giant is dialing back production plans for its next-generation RTX 50 series graphics cards.

Reading the Silicon Tea Leaves

News of potential production cuts sent a chill through the market. While NVIDIA hasn't officially commented, the reaction was immediate and clear on the trading floor. It's a classic case of the market punishing uncertainty—especially for a company whose valuation is so tightly wound around its ability to keep selling silicon at a breakneck pace.

The Ripple Effect

This isn't just about gaming rigs. NVIDIA's GPUs are the engines of the AI boom, and any perceived slowdown in their roadmap makes investors twitchy. It raises questions about demand forecasts, inventory levels, and whether the breakneck growth of the past few years is hitting a natural—or manufactured—speed bump.

A pause in the relentless upgrade cycle could signal a more cautious outlook from the company itself, or simply a strategic recalibration. Either way, Wall Street hates a surprise, particularly when it involves trimming the sails on a flagship product.

For now, the dip is a reminder that in tech, even the mightiest can stumble on rumors. It's a volatility that would give a traditional finance manager heartburn, but for the markets? Just another Wednesday.

TLDR:

• NVIDIA’s GPU production cuts may affect RTX 50 series availability.
• Memory shortages could lead to 30-40% reduction in NVIDIA GPU output.
• Gaming GPU prices may rise due to limited NVIDIA RTX 50 stock.
• Memory shortages impact NVIDIA’s midrange GPU production for 2026.
• NVIDIA focuses on premium GPUs, limiting RTX 50 availability.

NVIDIA (NVDA) stock price fell by 3.40% to $171.67 after reports surfaced indicating potential production cuts for its GeForce RTX 50 series GPUs.

NVIDIA Corporation, NVDA

Sources within the Asian supply chain have claimed that Nvidia may reduce GPU output by as much as 30-40% during the first half of 2026. The decrease in supply could be linked to ongoing memory shortages, including GDDR6, GDDR7, and DRAM chips, which are essential for manufacturing these graphics cards.

The shortage of memory components, such as GDDR6 and GDDR7, is expected to constrain production in the coming months. Reports suggest that NVIDIA’s production of midrange GPUs like the GeForce RTX 5070 Ti and RTX 5060 Ti 16GB will be impacted first. These models, known for their strong performance in 1440p and 4K gaming, are expected to face reduced availability due to limited memory supply.

In addition to memory shortages, global DRAM wafer constraints and the demand for advanced packaging materials for AI accelerators are contributing to these production challenges. The increasing demand for cloud computing and AI hardware has intensified competition for these critical materials, limiting availability for consumer graphics cards. Consequently, production cuts for midrange GPUs appear inevitable, even if the company maintains its official pricing.

NVIDIA’s potential production cuts could have a Ripple effect on the broader gaming market, especially for DIY builders and retail customers. With fewer units of the RTX 50 series available, the gap between demand and supply may lead to higher street prices. AIB (Add-In-Board) partners and retailers may adjust their margins as a result of allocation pressures, leading to price increases despite NVIDIA’s attempts to keep official MSRPs stable.

AMD could follow suit, raising GPU prices by around 10% as it grapples with similar memory supply constraints. As the industry faces reduced availability of components, consumers may find fewer deals on gaming GPUs. This trend could lead to longer wait times for restocking and a tight market for popular configurations.

NVIDIA is strategically focusing its memory resources on high-margin products, such as premium GPUs and data-center hardware. By reducing the supply of lower-end models, the company can better allocate memory to its more profitable offerings. While this decision could help preserve revenue margins, it might leave midrange gamers with limited options in the NEAR term.