- Wednesday, October 16, 2024
Nvidia's stock saw an early uptick on Tuesday, as investors seemed more optimistic about the company's cheaper valuations compared to worries over chip exports to China.
The stock was up 1.9% at $463.82 in early trading, signaling a potential end to its three-day losing streak.
Despite Nvidia's impressive three-fold increase in stock price this year, concerns loom over the company's exports to China in light of US restrictions. In response, Nvidia has taken steps to develop artificial-intelligence chips that comply with US regulations for sale within China. However, the latest statement from the Biden administration indicates that government officials will closely monitor these efforts and intervene if necessary.
Commerce Secretary Gina Raimondo emphasized in a recent speech at a national defense forum that any attempts to circumvent regulations would not go unnoticed. She specifically referred to the redesigning of chips with features enabling AI capabilities.
In response to this warning, Oppenheimer analyst Rick Schafer expressed caution, stating that the United States is determined to prevent China from acquiring any technology that could potentially be used for AI development. Schafer, however, maintains a positive outlook with a Buy rating and a price target of $650 for Nvidia stock.
On a contrasting note, the recent decline in Nvidia's stock price from its late November peak of over $500 has sparked interest among some analysts who view it as a buying opportunity. Melius Research analyst Ben Reitzes, for example, highlighted that Nvidia's current valuation is approximately 20 times projected 2025 earnings per share. Reitzes maintains a Buy rating and sets a target price of $750 for the stock.
Reitzes also emphasized the value of Nvidia's comprehensive approach, including software integration, which he believes justifies a premium in the market.
In summary, while concerns persist about chip exports to China, the market seems to be responding positively to Nvidia's valuations and potential buying opportunities.
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