NVIDIA shares under pressure
Despite Wall Street being on a half day today for the Thanksgiving long weekend, one pre-market stock mover is NVIDIA.
The artificial intelligence chipmaker told customers in China it is delaying the launch of a new AI semiconductor chip.
Designed to comply with US export rules, the launch of the H20 chip, the most powerful of three China-focused chips, will be delayed until the first quarter of next year, according to Reuters citing two sources.
This adds to the pressure NVIDIA stock has already seen this week from the vastly expanded north American export controls on what tech companies can sell to China. Sales of the affected chips made up nearly a quarter of NVIDIA’s data centre sales in the past few quarters.
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NVIDIA stock plummets
NVIDIA's stock has taken a hit recently and there are a couple of reasons behind it.
First, there have been some negative reports about chip sales to China and concerns about the ongoing trade discussions between the US and China. This has caused a bit of a slowdown in the demand for NVIDIA's high-end AI chips in China, which has led to a decrease in their stock.
Another factor is the delay in launching a new artificial intelligence chip called the H20 chip. Although it hasn't been officially confirmed, word is that the launch has been pushed back until next year. This delay has also contributed to the decline in NVIDIA's stock value.
Will NVIDIA stock recover?
Now, when it comes to predicting what will happen with NVIDIA's stock in the future, it gets a bit tricky. After hitting a low point on October 31st, their stock has bounced back a bit, but it still hasn't reached the record highs it saw back in August. So, it's hard to say which way it will go from here.
There are a couple of things to keep an eye on though. If the stock manages to go above the highs it reached on November 21st, it might be a good time to sell. On the other hand, if there continues to be a decline, there's a support level at $436.82 that could be a good spot to aim for.
One thing to be wary of is if the stock closes below the retracement level at $392.45, that could be a sign of a longer-term drop in value. Ultimately, the two main things affecting NVIDIA's stock are the trade tensions between the US and China and the delay in the H20 chip. These factors are having an impact on Chinese demand for NVIDIA's products and that's likely to continue affecting their stock performance.
In fact, it's expected that NVIDIA's stock will open lower in today's half-day trade. So, it's definitely an interesting time for NVIDIA and those who are trading their stock.
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