According to reports, Nvidia (NVDA) shares surged on Thursday in anticipation of the company’s launch of a new series of AI chips tailored for the Chinese market. These new cards have been specifically designed to comply with the latest trade restrictions imposed by the United States.
The stock of Nvidia reached a peak of 482.30 in the market today. As per the IBD MarketSmith data, Nvidia’s stock broke out of a double-bottom base, closing at 476.09. However, the momentum subsided later in the day, with the stock finishing at 469.50, reflecting a modest 0.8% increase.
As reported by The Financial Times, Nvidia is expected to unveil its latest data center cards possibly as soon as next week. This announcement follows the recent tightening of trade restrictions by the U.S. government aimed at restricting China’s access to advanced silicon technology, particularly chips utilized in AI applications, raising concerns within the Biden administration about potential military applications by China.
Nvidia has had to adjust its product offerings for the Chinese market to comply with U.S. regulations, marking the second time in just over a year that such actions have been necessary.
The Financial Times mentioned that the three new Nvidia cards for the Chinese market are named H20, L20, and L2. To conform with the latest U.S. restrictions, Nvidia has reduced the efficiency of the processors.
There are four IBD lists featuring Nvidia stock.
The response from Wall Street analysts to this information has been positive.
According to Wedbush Securities analyst Matt Bryson, “Assuming reports are accurate, we would see Nvidia’s ability to resume shipping into China as a significant positive for the company (even if sales end up being somewhat diminished by restrictions).” He has a price target of 600 and rates Nvidia shares as a “beat.”
The company’s upcoming third-quarter earnings report, scheduled for November 21, represents the next potential catalyst for Nvidia.
Nvidia is included in four IBD stock lists—IBD 50, Leaderboard, Stock Spotlight, and Tech Leaders.
Nvidia is also part of the “Beautiful Seven stocks,” alongside Alphabet (GOOGL), Amazon.com (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), and Tesla (TSLA).
