Shares of semiconductor giant Nvidia continued to recover on Tuesday despite reports that the company is facing a new challenger in China.
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Citing anonymous sources, The Wall Street Journal reported that Huawei plans to launch a new AI chip for the Chinese market, which the company says will rival Nvidia’s H100. Huawei is expected to start shipping the new AI chip in October.
Nvidia (NVDA) introduced the H100 last year but is barred from selling it directly in China due to U.S. sanctions. The Biden administration has said it wants to block the Chinese military from importing advanced semiconductors and chip-making equipment.
Nvidia’s shares plummeted late last year after the Biden administration announced new restrictions targeting chips the company developed for the Chinese market. The U.S. also banned the sale of Huawei telecommunications equipment, citing national security risks.
Nvidia shares continue to rise
Despite potential challenges in China, Nvidia shares rose again, extending their gains for a second straight day.
The stock rose 4.4% to 113.84 in morning trading, above its 21-day average. NVDA shares rose 4.1% on Monday, recovering from an Aug. 5 low of 90.69. They’re still trading below their 50-day moving average.
Other chipmakers also rose on Tuesday, with Advanced Micro Devices (AMD) up more than 2% to 139.59, Intel (INTC) up more than 2% to 19.80 and Qualcomm (QCOM) up more than 1% to 164.67, all of which have fallen sharply in the past few months.
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