Nvidia’s stock has been under pressure as investors weigh the impact of potential new regulations on exporting artificial intelligence chips to China, but Wall Street remains optimistic about the stock. Following a Wall Street Journal report that the Biden administration is considering further restricting sales of chips from Nvidia and others, including Nvidia’s A800 chip, which was designed specifically for China after the last round, Shares were down about 1% by Wednesday. of restrictions. Analysts predict 10% to 15% of Nvidia’s data center revenue this year could come from China. For Bank of America, the range falls between 7% and 10%. The company reported $1.59 billion in revenue from China, including Hong Kong, in the first quarter of fiscal 2024, accounting for about 22% of its total revenue, the company said. Goldman Sachs analyst Toshiya Hari said in a short-term forecast, “NVDA has significant growth opportunities outside of China, so we can expect steady outperformance from NVDA in the medium to long term.” It could put pressure on stock prices, he said. Wednesday’s note cites opportunities across cloud service providers, consumer internet companies and others. “We maintain a buy rating and will view any share price volatility as an opportunity to add positions,” he added. Matthew Prisco of Evercore ISI wrote in a note, “Given the global prevalence of AI and his positioning of NVDA as a key enabler, we do not believe this will derail the bullish theory.” . “With his more targeted approach to restrictions and his NVDA proven agility, he does not expect this to be a major issue for NVDA.” , called the news “a bit of a speed bump on the AI highway.” Plisco said in a note Tuesday that in the short term Nvidia should be able to ship its current backlog. Additionally, the company softens headwinds based on “chip structure flexibility,” as evidenced when it developed the A800 as an advanced chip for China to comply with US export restrictions revealed last summer. It should be possible. NVDA YTD Mountain Nvidia Year-to-date City analysts also said he believes demand for AI will outstrip supply this year, and that NVIDIA “can move the chip.” Bank of America says the momentum of U.S. hyperscale customers “could absorb additional product availability” and eventually China could respond with AI-related accelerator hardware He said it would be less than 10% of the $100 billion-plus market. — CNBC’s Michael Bloom contributed coverage.
