Nvidia Shares Fall Following US Government’s Export Restrictions on Advanced Chips to China
Nvidia Faces Setback as US Imposes Export Controls
Nvidia, the American technology company, saw its shares decline further after the US government announced restrictions on the export of advanced chips to China. The company’s stock fell by 1.5% in early Wednesday trade, following a 4.7% drop on Tuesday. Nvidia expressed concerns about the potential impact of these export controls on its product development, customer support, and supply chain. However, the company stated that these challenges are not expected to have an immediate financial impact.
Export Controls Create Challenges for Nvidia
Nvidia may need to reevaluate and potentially relocate certain operational aspects in response to the export controls. The United States has specifically restricted Nvidia’s A800 and H800 series, which were tailored for the Chinese market. This move has prompted major Chinese customers to stockpile these 800-series chips in anticipation of future restrictions.
Analysts Lower Price Targets on Nvidia Stock
Following the regulatory filing and the government’s decision, analysts at Citi and Morgan Stanley have revised their price targets for Nvidia stock. Citi analysts noted that the new performance density thresholds would make it difficult for Nvidia to sell to China. As a result, they lowered their price target by $55 per share to $575. Meanwhile, Morgan Stanley analysts reduced their price target by $30 to $600 per share, citing the more stringent export controls as the reason. Despite these setbacks, both firms remain optimistic about Nvidia’s future growth potential in the field of artificial intelligence.
Looking Ahead for Nvidia
While the export restrictions pose a significant challenge for Nvidia, the company is expected to continue exceeding expectations. Nvidia remains a top pick in the semiconductor industry, thanks to its ongoing advancements in artificial intelligence. The impact of these export controls on Nvidia’s business will be closely monitored, but the company’s long-term prospects remain promising.
