What's Going On With Nvidia Stock Thursday?

The U.S. government has broadened its crackdown on the exports of cutting-edge artificial intelligence (AI) chips developed by Nvidia Corp NVDA and Advanced Micro Devices Inc AMD to regions beyond China. This expansion now includes several Middle Eastern nations.

In a recent regulatory disclosure, Nvidia revealed that the imposed restrictions on its A100 and H100 chips, specifically engineered for enhanced machine-learning capabilities, would not significantly disrupt its financial outcome, Reuters reports.

Traditionally, the U.S. imposes export controls on countries like China, primarily driven by national security concerns. 

AMD, Nvidia's contender, reportedly received a notice entailing similar export constraints. 

However, this development is unlikely to affect its revenue. Separately, Nvidia stated its commitment to collaborating with U.S. officials to navigate this issue. 

In 2022, Nvidia, AMD, and Intel Corp INTC unveiled strategies to design and manufacture less potent AI chips tailored for the Chinese market.

The lion's share of Nvidia's $13.5 billion sales for the quarter concluding on July 30 originated from the United States, China, and Taiwan. The combined sales from other countries contributed approximately 13.9% to the total.

Meanwhile, Quanta Cloud Technology (QCT), an essential ally of Nvidia, is projecting a doubling in sales for its AI servers in 2024 courtesy of the increasing integration of AI in businesses globally.

QCT President Mike Yang conveyed a robust future for AI, expecting its growth to intensify over the coming years. 

As a subsidiary of Taiwan's Quanta Computer Inc, QCT's alliance with Nvidia has significantly benefited from Wall Street's enthusiastic backing of AI. 

Quanta's stock value witnessed a twofold rise in 2023, mirroring Nvidia's stellar performance.

Addressing Nvidia's ongoing AI chip shortage, Mike Yang is optimistic that Nvidia will effectively address supply constraints in the coming year. Notably, AI servers now make up 65% of QCT's annual multi-billion-dollar revenues, and the differentiation is marked by AI servers utilizing graphic processors like Nvidia's, contrasting with traditional ones dominated by Intel.

QCT's clientele boasts industry giants such as Alphabet Inc GOOG GOOGL Google Cloud, Amazon.com Inc's AMZN AWS, and Alibaba Group Holding Ltd BABA. 

TrendForce, a research firm based in Taipei, predicts AI server shipments to grow annually by 29% from 2022 to 2026. 

Price Action: NVDA shares traded lower by 0.29% at $494.05 premarket on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.