What's Going On With Nvidia Stock On Monday?

Benzinga · 10/14 16:46

A government-backed think tank in China has recommended that the country’s data centers continue using high-performance chips from Nvidia Corp (NASDAQ:NVDA), warning of the significant expenses involved in transitioning to domestic alternatives.

The report flagged the transition from Nvidia’s GPUs to domestic solutions as challenging due to differences in hardware and software that increase costs and complexity.

Nvidia, which has maintained that the U.S. semiconductor embargo has had no impact, is trading higher on Monday.

Also Read: Next-Gen Nvidia GPUs Could Be Revealed at CES 2025 – What You Need to Know

The China Academy of Information and Communications Technology (CAICT) noted that Nvidia’s A100 and H100 chips are still the preferred option for centers requiring substantial computing power, SCMP reports.

The U.S. semiconductor sanctions prompted Nvidia to develop specially tailored A800, H800, and H20 chips. China is a key semiconductor market for Nvidia, and in 2024, 1 million H20 GPUs in China could generate $12 billion in sales. 

China’s GPU-based computing power, especially for AI development, has been growing by 70% year-over-year. However, CAICT’s latest report said many data centers are underutilized due to mismatches between supply and demand and a lack of standardized hardware across different centers.

KeyBanc analyst John Vinh flagged Nvidia as the favorite, backed by Blackwell, which could potentially contribute over $7 billion in revenues in the fourth quarter. Strong Hopper demand could translate into ~15% sequential revenue growth in the fourth quarter, according to the analyst.

Nvidia chief Jensen Huang recently acknowledged tremendous demand for Nvidia’s Blackwell GPU, whose production is going as planned.

Nvidia stock has gained over 200% in the last 12 months. Investors can gain exposure to the stock through the SPDR S&P 500 (NYSE:SPY) and the iShares Core S&P 500 ETF (NYSE:IVV).

Price Action: NVDA stock is up 2.80% at $138.61 at the last check on Monday.

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