What's Going On With Chip Stocks Like Nvidia, Taiwan Semi And AMD on Monday?

Semiconductor stocks, led by Nvidia Corp NVDA, are trading lower Monday amid reports that Beijing is encouraging Chinese firms to focus on domestic artificial intelligence (AI) chips from companies like Cambricon Technologies Corp and Huawei Technologies Co.

The move marks an escalation of geopolitical tensions between China and the U.S.

Nvidia suppliers and rivals including Taiwan Semiconductor Manufacturing Co TSM, Broadcom Inc AVGO, Advanced Micro Devices, Inc AMD, Intel Corp INTC, Arm Holdings plc ARM, Texas Instruments Inc TXN, Marvell Technology, Inc MRVL, Micron Technology, Inc MU, ON Semiconductor Corp ON, STMicroelectronics NV STM are down in pin action with the interconnectivity of the semiconductor ecosystem.

AI server company Super Micro Computer, Inc SMCI is also down.

China recently announced plans to slash its key rates to drive growth, shadowing the U.S. move. The countries expect the move to drive discretionary spending, which in turn will drive economic growth.

Also Read: Nvidia Stock Could Touch $800 By 2030, BGG Executive Predicts 550% Upside Driven By AI Revolution And Web3 Transition

Prior reports indicated that Nvidia was on track to sell $12 billion of artificial intelligence chips in China in 2024 through the sale of over 1 million new H20 chips, with each chip costing $12,000-$13,000.

Meanwhile, U.S. hyperscalers, including Microsoft Corp MSFT and Google parent Alphabet Inc GOOG GOOGL remain invested in their AI endeavors, signaling continued demand for Nvidia AI chips.

Chinese hyperscalar Alibaba Group Holding BABA also collaborated with Nvidia on autonomous driving experience.

AMD Stock Prediction For 2024

Equity research can be a valuable source of information for learning about a company's fundamentals. Analysts create financial models based on the fundamentals and expected future earnings of a company to arrive at a price target and recommendation for the stock.

Shares of Advanced Micro Devices have an average 1-year price target of $196.27, representing an expected upside of 19.42%.

Because of differences in assumptions, analysts can arrive at very different price targets and recommendations. No analysts have bearish recommendations on Advanced Micro Devices, while 13 analysts have bullish ratings. The street high price target from Rosenblatt is $250.0, while the street low from Truist Securities is $156.0.

Price Action: NVDA stock is down 2.65% at $118.18 premarket at the last check on Monday.

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• AMD Chief Predicts Custom Chips Will Outperform GPUs, Sees Shift in AI Chip Demand: Report

Photo: Nazrul Iznan via Shuttestock