Nvidia Corp (NASDAQ:NVDA) stock is trading lower Friday in line with the broader index after July PPI data showed greater-than-expected inflation.
Shares of semiconductor and chip stocks are trading lower amid overall market weakness.
The stock also remains vulnerable to concerns fuelled by U.S.’s additional sanctions on China concerning artificial intelligence chips. The country accounts for a sizable revenue due to the ChatGPT frenzy.
Chinese companies harboring AI ambitions, including Alibaba Group Holding (NYSE:BABA), have ordered Nvidia AI chips in bulk, fearing a supply crisis due to U.S.’s additional embargo on the industry.
Separately, concerns loom over Nvidia’s ability to supply AI chips, as the demand will likely outdo the supply. The crisis will probably be a tailwind for Advanced Micro Devices, Inc (NASDAQ:AMD) and Samsung Electronics Co, Ltd (OTC:SSNLF).
Broader index ETF Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) traded lower by close to 1%. SPDR S&P 500 (NYSE: SPY) is also down.
BofA Securities analyst Vivek Arya expects the sentiment to be more measured after last quarter’s upbeat report.
Upside supply driven, especially as data-center mix-shift shifts to H100 ($30K vs. A100 at $10K), downside risk could be gaming which is vulnerable to weak macro trends.
Post-earnings reaction could see near-term stock consolidation following the 200%+ move up YTD (vs. SOX up 46%).
Price Action: NVDA shares traded lower by 3.10% at $410.72 on the last check Friday.
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