What's Going On With Nvidia Stock Monday?
Portfolio Pulse from Anusuya Lahiri
Chinese semiconductor design companies are partnering with Malaysian firms to assemble GPUs as a precaution against potential U.S. sanctions. Nvidia Corp (NVDA), with a significant market share in GPUs, may be affected by these developments. Malaysia is becoming a hub for chip assembly due to its skilled workforce and technology. Nvidia recently lost a major AI chip order from Baidu Inc (BIDU) to Huawei, likely due to U.S. restrictions on AI chip technology exports to China. NVDA shares saw a slight increase in premarket trading.
December 18, 2023 | 1:07 pm
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Nvidia's dominant position in the GPU market could be challenged by Chinese companies partnering with Malaysian firms for chip assembly, potentially bypassing U.S. sanctions. Nvidia's recent loss of a major AI chip order to Huawei due to U.S. restrictions also highlights geopolitical risks.
The partnership between Chinese and Malaysian firms for GPU assembly could provide a workaround to U.S. sanctions, potentially reducing Nvidia's market share in China. The loss of the Baidu AI chip order to Huawei due to U.S. restrictions further underscores the impact of geopolitical tensions on Nvidia's business.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Baidu Inc chose Huawei over Nvidia for a significant AI chip order, likely due to U.S. export restrictions on AI technology to China. This indicates Baidu's strategy to navigate the geopolitical landscape and could impact future collaborations with U.S. chipmakers.
Baidu's decision to go with Huawei for an AI chip order instead of Nvidia suggests a strategic move to comply with U.S. restrictions and may not directly impact Baidu's stock in the short term but could influence its future procurement strategies and partnerships.
CONFIDENCE 70
IMPORTANCE 50
RELEVANCE 60