Shares of Nvidia Corporation (NVDA - Free Report) were down more than 3.3% through early afternoon trading Thursday. The dip appears to be a cautionary response to recent reports that a certain electric car giant had chosen its chip-making rival for a new AI partnership.
On Wednesday afternoon, CNBC reported that Tesla (TSLA - Free Report) had recruited the services of Advanced Micro Devices (AMD - Free Report) to develop an AI-powered self-driving car chip. According to the publication’s source, Tesla has assigned more than 50 employees to the project.
Wall Street’s immediate reaction was to declare the partnership a significant validation of AMD’s technology, and shares of the chipmaker subsequently popped more than 5% on Wednesday afternoon (also read: Investors Bullish on AMD's AI Partnership with Tesla).
“The net/net here for AMD is that Tesla has confirmed AMD's CPU and GPU roadmaps in a field that nobody was considering as viable; it says that AMD's CPU/GPUs in PC and server markets are the real deal,” said Rosenblatt Securities analyst Hans Mosesmann in a note.
Up to this point, Nvidia has been considered the standalone AI chip king, so an entrance into this booming market by AMD—already a major competitor in the GPU space—might be enough to make some investors cautious.
However, we’ve already seen some detraction from CNBC’s original story. In fact, Reuters just published a new report that cited a spokesperson from GlobalFoundries, which fabricates chips for AMD, who said that Tesla has not committed to any partnership with the chipmaker.
“Tesla has not committed to working with us on any autonomous driving technology or product,” the spokesperson told Reuters.
On top of this, it’s unlikely that the partnership would have a significant impact on AMD’s bottom line, so analysts were quick to tell Nvidia investors to shake off the news. In a note on Thursday, RBC Capital analyst Mitch Steves told investors to “ignore the noise,” while B. Riley analyst Craig Ellis said the report was more of a “psychological” negative than anything else.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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Shares of Nvidia Corporation (NVDA - Free Report) were down more than 3.3% through early afternoon trading Thursday. The dip appears to be a cautionary response to recent reports that a certain electric car giant had chosen its chip-making rival for a new AI partnership.
On Wednesday afternoon, CNBC reported that Tesla (TSLA - Free Report) had recruited the services of Advanced Micro Devices (AMD - Free Report) to develop an AI-powered self-driving car chip. According to the publication’s source, Tesla has assigned more than 50 employees to the project.
Wall Street’s immediate reaction was to declare the partnership a significant validation of AMD’s technology, and shares of the chipmaker subsequently popped more than 5% on Wednesday afternoon (also read: Investors Bullish on AMD's AI Partnership with Tesla).
“The net/net here for AMD is that Tesla has confirmed AMD's CPU and GPU roadmaps in a field that nobody was considering as viable; it says that AMD's CPU/GPUs in PC and server markets are the real deal,” said Rosenblatt Securities analyst Hans Mosesmann in a note.
Up to this point, Nvidia has been considered the standalone AI chip king, so an entrance into this booming market by AMD—already a major competitor in the GPU space—might be enough to make some investors cautious.
However, we’ve already seen some detraction from CNBC’s original story. In fact, Reuters just published a new report that cited a spokesperson from GlobalFoundries, which fabricates chips for AMD, who said that Tesla has not committed to any partnership with the chipmaker.
“Tesla has not committed to working with us on any autonomous driving technology or product,” the spokesperson told Reuters.
On top of this, it’s unlikely that the partnership would have a significant impact on AMD’s bottom line, so analysts were quick to tell Nvidia investors to shake off the news. In a note on Thursday, RBC Capital analyst Mitch Steves told investors to “ignore the noise,” while B. Riley analyst Craig Ellis said the report was more of a “psychological” negative than anything else.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think. See This Ticker Free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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