If you’ve been watching your portfolio lately, you saw it—a little bit of unexpected turbulence for NVDA stock. The headlines were buzzing, and the financial news channels were in a frenzy. The story going around was that a leaked, next-generation project from a major partner, OpenAI, sent NVDA stock on a brief rollercoaster. But as with most things in the market, the real story is a bit more nuanced.

Let’s pull up a chair and talk about what actually happened, why the market reacted the way it did, and what it truly means for you as an investor looking at the future of artificial intelligence.

So, What actually Happened with NVDA Stock?

Let’s set the scene. It was Tuesday, May 28th, 2024. The trading day started like any other, but then a specific piece of news started making the rounds.

The rumor, which seems to have originated from a tech forum and was then amplified by a popular finance account on X (formerly Twitter), suggested that OpenAI was working on a new, massive AI model. The twist? This new model, codenamed “Strawberry,” was rumored to be so incredibly efficient that it would drastically reduce the company’s reliance on Nvidia’s powerhouse H100 GPUs.

Think about that for a second. The entire AI boom, the rocket fuel behind the incredible rise of NVDA stock, has been built on one simple premise: everyone needs Nvidia’s chips. They are the shovels in this gold rush. So, the idea that the biggest gold miner (OpenAI) might suddenly need far fewer shovels? Well, you can imagine how that landed on Wall Street.

For a brief moment, the market panicked. We saw a swift, sharp dip in the share price. It was a classic “sell first, ask questions later” moment. The fear was palpable: was the Nvidia growth story facing its first major threat from its own biggest customer?

The Rumor Mill vs. The Reality Check

Here’s where we need to take a deep breath and separate the exciting rumor from the boring, but crucial, reality.

First, let’s talk about this “Strawberry” project. From what credible sources have pieced together, this isn’t some secret plot to dethrone Nvidia. It appears to be an internal research and development project focused on enhancing AI reasoning capabilities. It’s about making AI smarter, not necessarily about using fewer chips.

The leap in logic the rumor mill made was a massive one. They assumed that improved reasoning automatically means a massive reduction in computational needs. But that’s not how this works. Creating a more complex, more intelligent AI model could, in its initial training phases, actually require more computing power, not less. You’re building a more sophisticated engine, not a smaller one.

Secondly, and this is the critical part, OpenAI immediately went into damage control. A spokesperson for the company came out and flatly denied the core premise of the rumor. They stated clearly that OpenAI is not, I repeat, not, reducing its orders for Nvidia’s H100 GPUs. In fact, they emphasized that they see Nvidia as a vital, long-term partner.

So, the entire foundation of the sell-off—the idea of canceled orders—was built on sand. It was a classic case of the market misinterpreting a technical R&D project as an immediate, existential threat to a business model.

Why NVDA Stock Is So Much More Than One Rumor

This little episode, while dramatic for a day, actually highlights the incredible position Nvidia is in. To think that one piece of speculative news could cause such a stir shows you just how much of a linchpin this company has become in the global tech ecosystem.

Let’s break down why the long-term story for NVDA stock remains incredibly robust, rumors notwithstanding.

1. The Ecosystem is Just Too Big.
OpenAI is a massive player, but they are just one player. The AI race is a global free-for-all. Every major tech company on the planet—from Google and Microsoft to Meta and Amazon—is in an arms race to build the best AI. And then you have thousands of startups, research institutions, and foreign governments all doing the same thing.

They all need Nvidia’s chips. Even if one company magically found a way to reduce its demand by 10%, a hundred other companies are waiting in line to take its place. The demand is simply staggering and far outstrips the current supply.

2. It’s Not Just About the Chips Anymore.
A common mistake is to view Nvidia as just a hardware company. That’s like calling Apple just a phone maker. Nvidia has spent years building a complete software and systems moat around its hardware. Their CUDA software platform is the undisputed standard for AI development. An entire generation of AI researchers and engineers has been trained on it.

Migrating an entire industry to a new software ecosystem is nearly impossible. This “full stack” approach—providing the chips, the systems, the networking, and the software—creates a level of customer lock-in that is the envy of the business world.

3. The Next Wave is Already Here: Blackwell.
While everyone was fretting about a rumor, Nvidia was quietly (or not so quietly) preparing for its next act. The company’s next-generation AI GPU platform, called “Blackwell,” is already announced and is set to begin shipping later this year. Early benchmarks suggest it’s a monumental leap in performance over the already-dominant H100.

This isn’t a company resting on its laurels; it’s a company that is actively working to make its own previous technology obsolete. This constant innovation cycle ensures they stay ahead of any potential competitors.

The Real Takeaway for Investors Watching NVDA Stock

So, what’s the lesson from this whole episode? It’s a timeless one for investors: don’t confuse noise for signal.

The “Strawberry” rumor was noise—a loud, distracting bang that caused a short-term reaction. The signal, the true underlying trend, is the multi-trillion-dollar digital transformation of the entire global economy, all of which will be powered by AI. And right now, Nvidia is the company holding the keys to the kingdom.

Volatility like we saw on May 28th is part and parcel of investing in a company that sits at the very center of a technological revolution. The stocks of transformative companies are never smooth, steady climbers. They are marked by periods of explosive growth, painful corrections, and knee-jerk reactions to headlines.

For long-term investors, the focus shouldn’t be on whether one customer might, someday, slightly alter their procurement strategy. The focus should be on the fundamental, undeniable trend: the world is hungry for computational power, and Nvidia is the only company that can serve the entire five-course meal, from the appetizers to the dessert.

The brief dip in NVDA stock wasn’t a warning sign; it was a reminder. A reminder of how jittery the market can be, and more importantly, a reminder of just how critical Nvidia has become. When a single unconfirmed rumor about one partner can move the stock, you know you’re dealing with a company that is truly systemically important. And in the world of investing, that’s often the best kind of company to own for the long haul.