We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
NVIDIA (NVDA) Down 5% on New Chip Export Restriction to China
Read MoreHide Full Article
NVIDIA Corporation (NVDA - Free Report) shares plunged 4.7% on Tuesday after it revealed that the U.S. government has imposed fresh restrictions on the sale of artificial intelligence (AI) chips and manufacturing equipment to China. The new restriction is an expansion to the export curbs on NVIDIA chips forced in late August 2022.
The newly expanded restrictions will block NVIDIA from selling two AI chips — A800 and H800 — specifically created for the Chinese market following last year’s export curb. The blocked chip sale list also includes one of the company’s top gaming chips, RTX 4090, as well as L40 and L40S.
Last year, the U.S. government restricted NVIDIA from selling its A100, A100X and H100 integrated circuits to China and Russia. The government also banned NVIDIA from exporting DGX or other systems incorporating A100 or H100 integrated circuits.
The newly expanded restrictions can be seen as the U.S. government’s continued efforts toward restricting China from getting its hands on cutting-edge technologies that can strengthen its military.
However, the expanded restrictions are going to hurt NVIDIA’s business in China. In a filing with the Securities and Exchange Commission, the company revealed that it may be forced to move out its business operations from countries on the U.S. government’s export restriction list. The rules are likely to impact NVDA’s ability to support existing customers and complete the development of certain products timely.
However, considering the strong demand for its products worldwide, NVIDIA believes the new restrictions will have no meaningful impact on financial results in the near term.
NVIDIA has been on a remarkable run since the beginning of 2023, with its share prices soaring 200.6% year to date (YTD) on hopes that the company will be a prime beneficiary of growing investments in generative AI.
Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. It is driven by a large language model, which means it uses a lot of data to understand and generate conversations.
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started. The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will be required to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. The company’s CEO, Jensen Huang, already stated during the first-quarter fiscal 2024 earnings conference call that existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its third-quarter fiscal 2024 revenues to reach $16 billion from $5.93 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Zacks Rank & Other Stocks to Consider
Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for Palo Alto Networks' first-quarter fiscal 2024 earnings has been revised upward by 6 cents to $1.16 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 39 cents to $5.34 per share in the past 60 days.
Palo Alto Networks’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 22.2%. Shares of PANW have surged 87.6% YTD.
The Zacks Consensus Estimate for Salesforce’s third-quarter fiscal 2024 earnings has been revised 23 cents northward to $2.06 per share in the past 60 days. For fiscal 2024, earnings estimates have moved 8.3% upward to $8.06 per share in the past 60 days.
Salesforce’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 14.2%. Shares of CRM have risen 58.3% YTD.
The Zacks Consensus Estimate for Twilio's third-quarter 2023 earnings has been revised upward by a penny to 35 cents per share in the past 60 days. For 2023, earnings estimates have increased by 3 cents to $1.70 per share in the past 60 days.
Twilio’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 149.1%. Shares of TWLO have risen 18.7% YTD.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
NVIDIA (NVDA) Down 5% on New Chip Export Restriction to China
NVIDIA Corporation (NVDA - Free Report) shares plunged 4.7% on Tuesday after it revealed that the U.S. government has imposed fresh restrictions on the sale of artificial intelligence (AI) chips and manufacturing equipment to China. The new restriction is an expansion to the export curbs on NVIDIA chips forced in late August 2022.
The newly expanded restrictions will block NVIDIA from selling two AI chips — A800 and H800 — specifically created for the Chinese market following last year’s export curb. The blocked chip sale list also includes one of the company’s top gaming chips, RTX 4090, as well as L40 and L40S.
Last year, the U.S. government restricted NVIDIA from selling its A100, A100X and H100 integrated circuits to China and Russia. The government also banned NVIDIA from exporting DGX or other systems incorporating A100 or H100 integrated circuits.
The newly expanded restrictions can be seen as the U.S. government’s continued efforts toward restricting China from getting its hands on cutting-edge technologies that can strengthen its military.
However, the expanded restrictions are going to hurt NVIDIA’s business in China. In a filing with the Securities and Exchange Commission, the company revealed that it may be forced to move out its business operations from countries on the U.S. government’s export restriction list. The rules are likely to impact NVDA’s ability to support existing customers and complete the development of certain products timely.
However, considering the strong demand for its products worldwide, NVIDIA believes the new restrictions will have no meaningful impact on financial results in the near term.
NVIDIA Corporation Price and Consensus
NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote
Investments in GenAI Drive NVIDIA’s Top Line
NVIDIA has been on a remarkable run since the beginning of 2023, with its share prices soaring 200.6% year to date (YTD) on hopes that the company will be a prime beneficiary of growing investments in generative AI.
Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. It is driven by a large language model, which means it uses a lot of data to understand and generate conversations.
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started. The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
However, generative AI requires vast knowledge to create content and needs huge computational power. As a result, enterprises looking to create generative AI-based applications will be required to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. The company’s CEO, Jensen Huang, already stated during the first-quarter fiscal 2024 earnings conference call that existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which is expanding its footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its third-quarter fiscal 2024 revenues to reach $16 billion from $5.93 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Zacks Rank & Other Stocks to Consider
Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks from the broader technology sector are Palo Alto Networks (PANW - Free Report) , Salesforce (CRM - Free Report) and Twilio (TWLO - Free Report) . Palo Alto sports a Zacks Rank #1, while Salesforce and Twilio each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Palo Alto Networks' first-quarter fiscal 2024 earnings has been revised upward by 6 cents to $1.16 per share in the past 60 days. For fiscal 2024, earnings estimates have increased by 39 cents to $5.34 per share in the past 60 days.
Palo Alto Networks’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 22.2%. Shares of PANW have surged 87.6% YTD.
The Zacks Consensus Estimate for Salesforce’s third-quarter fiscal 2024 earnings has been revised 23 cents northward to $2.06 per share in the past 60 days. For fiscal 2024, earnings estimates have moved 8.3% upward to $8.06 per share in the past 60 days.
Salesforce’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 14.2%. Shares of CRM have risen 58.3% YTD.
The Zacks Consensus Estimate for Twilio's third-quarter 2023 earnings has been revised upward by a penny to 35 cents per share in the past 60 days. For 2023, earnings estimates have increased by 3 cents to $1.70 per share in the past 60 days.
Twilio’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 149.1%. Shares of TWLO have risen 18.7% YTD.