What's Going On With Nvidia Stock Friday?

U.S. chip designer stock Nvidia Corp NVDA is trading lower Friday amid reports of the U.S. intensifying its semiconductor technology sanctions against China.

Reportedly, the U.S. is looking to close the leeway that helped Chinese companies access American artificial intelligence (AI) chips.

Even Nvidia supplier Taiwan Semiconductor Manufacturing Company Ltd TSM is eyeing permanent approval for shipment of U.S. chip equipment to its facility in Nanjing amid intensifying U.S.-China tensions.

On Thursday, BofA analyst Vivek Arya reiterated Nvidia as a top pick with a price target of $650 following its updated product pipeline.

Nvidia showcased an accelerated pace of GPU accelerator and switching product launches in CY23, CY24, and CY25, support for x86 and ARM-based CPUs, InfiniBand + Ethernet switches, handling both genAI training, inference, and support for cloud and enterprise applications. Arya expects NVDA to also lead in the intro of AI accelerators on 3nm and likely 2nm nodes, perhaps in partnership with Intel Corp INTC foundry on its 18A process. However, he expects TSMC to be NVDA's primary foundry. 

Similar to NVDA's strategy in gaming, Arya believes the new data center roadmap disclosure suggests widening product breadth with an accelerated launch cadence that can continue to make it more challenging for merchant competitors to catch up. 

Big-picture, generative AI requires data center scale compute optimization, and NVDA's systems approach stands in contrast to the narrow silicon-only approach of its rivals. 

Arya believes potential upside of ~$42 billion, $70 billion, and $88 billion in NVDA's CY23, CY24, and CY25 data center sales (consensus), as it implies only ~35% share of a potential $250 billion (and growing) addressable annual opportunity in cloud/enterprise data center infrastructure capex.

Price Action: NVDA shares traded lower by 1.91% at $460.59 on the last check Friday.