Will Nvidia tumble on the stock market?
What will happen to Nvidia according to BG Saxo 's research office
The US government is potentially disrupting the Artificial Intelligence (AI) rally in the US stock market as it considers expanding export controls on chips to China.
THE IMPACT ON TECH STOCKS
Nvidia shares fell 4.5% last week, and the decline extended to other US tech stocks as well.
CHINA, EARNINGS ENGINE OF NVIDIA
Nvidia's geographic revenue data shows that China was by far the main driver of higher revenues in the first quarter of the fiscal year, as Chinese tech companies race to catch up with the US.
Expanded export controls on AI chips are by far the biggest risks to Nvidia's outlook given in May, by
accordingly investors should consider their exposure to this company.
Nvidia's geographic revenue data featured in the 10-K report reveals that revenues from China rose 67% quarter-on-quarter at the same time as the launch of the A800 and H800 chips, designed to avoid upfront US export controls.
THE GAME OF FRAGMENTATION AND DERISKING
The world has entered the “fragmentation game” which is an extension of the trade war initiated by the Trump administration in 2016. The “fragmentation game” is a geopolitical dynamic centered around the idea of derisking global supply chains.
ADVICE FOR INVESTORS
Investors with strong earnings in Nvidia and in US tech companies in general should consider de-risking their portfolios. We are currently seeing peaks of expectations that could be completely reduced.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/nvidia-ruzzolera-in-borsa/ on Sun, 09 Jul 2023 05:35:34 +0000.