Nvidia stock hit a buy point on Thursday amid reports that the chipmaker is set to announce a new series of AI chips for customers in China. The new chips are designed to comply with the latest U.S. government export restrictions.
On the stock market today, Nvidia climbed as high as 482.30. With the move, Nvidia stock broke out of a double-bottom base with a buy point of 476.09, according to IBD MarketSmith charts. However, Nvidia stock ran out of gas and ended the day up just 0.8% to 469.50.
The Financial Times reported that Nvidia could announce the new data center chips as early as next week. The news follows stepped-up trade restrictions by the U.S., meant to curb China's access to advanced semiconductor technology, including chips for artificial intelligence applications. The Biden administration is concerned that China could use those technologies for military purposes.
Nvidia's action would mark the second time in just over a year that it has reconfigured its products for Chinese customers to comply with U.S. regulations.
The three new Nvidia chips for China are called the H20, L20 and L2, the FT reported. Nvidia has lowered the performance of the processors to meet the latest U.S. restrictions.
Nvidia Stock Is On Four IBD Lists
Wall Street analysts responded positively to the news.
"Assuming reports are accurate, we would see Nvidia's ability to resume shipping into China as a significant positive for the company (even if sales end up being somewhat diminished by restrictions)," Wedbush Securities analyst Matt Bryson said in a client note. He rates Nvidia stock as outperform with a price target of 600.
The next potential catalyst for Nvidia is the company's fiscal third-quarter report, due on Nov. 21.
Nvidia stock is on four IBD stock lists: IBD 50, Leaderboard, Stock Spotlight and Tech Leaders.
Further, Nvidia is one of the so-called "Magnificent Seven stocks." The others are Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft and Tesla.
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