Semiconductor stocks, led by Nvidia Corp (NASDAQ:NVDA), are trading lower Monday amid reports that Beijing is encouraging Chinese firms to focus on domestic artificial intelligence (AI) chips from companies like Cambricon Technologies Corp and Huawei Technologies Co.
The move marks an escalation of geopolitical tensions between China and the U.S.
Nvidia suppliers and rivals including Taiwan Semiconductor Manufacturing Co (NYSE:TSM), Broadcom Inc (NASDAQ:AVGO), Advanced Micro Devices, Inc (NASDAQ:AMD), Intel Corp (NASDAQ:INTC), Arm Holdings plc (NASDAQ:ARM), Texas Instruments Inc (NASDAQ:TXN), Marvell Technology, Inc (NASDAQ:MRVL), Micron Technology, Inc (NASDAQ:MU), ON Semiconductor Corp (NASDAQ:ON), STMicroelectronics NV (NYSE:STM) are down in pin action with the interconnectivity of the semiconductor ecosystem.
AI server company Super Micro Computer, Inc (NASDAQ:SMCI) is also down.
China recently announced plans to slash its key rates to drive growth, shadowing the U.S. move. The countries expect the move to drive discretionary spending, which in turn will drive economic growth.
Prior reports indicated that Nvidia was on track to sell $12 billion of artificial intelligence chips in China in 2024 through the sale of over 1 million new H20 chips, with each chip costing $12,000-$13,000.
Meanwhile, U.S. hyperscalers, including Microsoft Corp (NASDAQ:MSFT) and Google parent Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) remain invested in their AI endeavors, signaling continued demand for Nvidia AI chips.
Chinese hyperscalar Alibaba Group Holding (NYSE:BABA) also collaborated with Nvidia on autonomous driving experience.
AMD Stock Prediction For 2024
Equity research can be a valuable source of information for learning about a company’s fundamentals. Analysts create financial models based on the fundamentals and expected future earnings of a company to arrive at a price target and recommendation for the stock.
Shares of Advanced Micro Devices have an average 1-year price target of $196.27, representing an expected upside of 19.42%.
Because of differences in assumptions, analysts can arrive at very different price targets and recommendations. No analysts have bearish recommendations on Advanced Micro Devices, while 13 analysts have bullish ratings. The street high price target from Rosenblatt is $250.0, while the street low from Truist Securities is $156.0.
Price Action: NVDA stock is down 2.65% at $118.18 premarket at the last check on Monday.
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