As news broke that the Biden administration was taking steps to deny Chinese firms access to cutting-edge AI computer processors, the stock price of NVDA dropped by 3% on last Friday. This development may impact the H100 Tensor Core GPU from Nvidia. Intriguingly, this stock movement deviated from the Dow Jones’s upward trajectory, which was driven by increases in the Dow Jones due to good earnings from JPMorgan (JPM), Citigroup (C), and Wells Fargo (WFC), which exceeded Wall Street expectations. Despite the banking industry’s prosperity, the NASDAQ Composite and the S&P 500 deviated from this pattern and began to decline.
Nvidia stock update
Export controls on AI chips may apply to overseas subsidiaries of a Chinese business. The Biden administration took a strong position against China in the previous autumn and imposed export restrictions on Nvidia’s H100 and A100 GPUs, which are used in the military and generative AI industries. The MI250 accelerator processor from Advanced Micro Devices (AMD) was also impacted by the restriction. Nvidia voiced worry that these new laws might impact as much as a $400 million drop in sales.
However, according to Reuters, the government is now aware that mainland Chinese enterprises are abusing a regulation loophole that permits Chinese companies’ abroad subsidiaries to purchase AI chips. Even though their businesses are far outside China’s borders, these foreign branches covertly ship the chips to the mainland or offer remote access to the chip technology.
As reported by Reuters, “[T]he very chips restricted by US regulations can be obtained from vendors in the renowned Huaqiangbei electronics district in the southern Chinese city of Shenzhen.”
Washington’s ability to effectively prevent China from accessing this AI technology is still unclear. Through middlemen like Amazon Web Services, which incorporates these chips into their state-of-the-art data centers, Chinese firms have already discovered methods to access this technology.
Analysis of the Nvidia stock: MACD Cross Signals Continued Uptrend
As of the most recent update, Nvidia’s stock was down just 0.8%, trading at $465 per share. However, investors shouldn’t worry too much since Nvidia is still on its upward trajectory, which started when it hit a low of under $410 on September 21. This shows that NVDA has been rising continuously for more than three weeks, and there are no obvious signals that this upward momentum is slowing down.
For a considerable amount of time, the Moving Average Convergence Divergence (MACD) indicator has been in a bullish crossover situation. The main trend here is an expanding upward channel, while there may be some resistance near the $470 level, as was seen during NVDA’s collapse in late July.
The price of NVDA has already crossed four times this year’s upper trendline. This market-leading semiconductor stock might reach $550 with a fifth touch. An increase of 18% seems more likely now that the MACD has crossed above the zero level.
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