What's Going On With Nvidia Stock Tuesday?

Nvidia Corp NVDA stock is trading lower along with its peers Tuesday in sync with significant indexes after Moody's downgraded its credit ratings of 10 U.S. banks and placed six others under review for potential downgrades.

Broader market index ETFs, including SPDR S&P 500 SPY and Invesco QQQ Trust, Series 1 QQQ, are trading lower by over 1% Tuesday.

Also Read: Nvidia's Demand-Supply Mismatch Imply Opportunities For This Chipmaker, Another AI Beneficiary; Fitch Downgrades US Credit Rating

Last week, Fitch downgraded the U.S. credit rating to AA+ from AAA, citing fiscal deterioration and repeated down-the-wire debt ceiling negotiations. With the downgrade, it becomes the second central rating agency after Standard & Poor's to strip the U.S. of its triple-A rating.

On Tuesday, Nvidia launched the GH200 Grace Hopper platform based on a new Grace Hopper Superchip with the world's first HBM3e processor built for accelerated computing and generative AI.

The dual configuration — which delivers up to 3.5x more memory capacity and 3x more bandwidth than the current generation offering — comprises a single server with 144 Arm Neoverse cores, eight petaflops of AI performance, and 282GB of the latest HBM3e memory technology.

Meanwhile, reports indicate Taiwan Semiconductor Manufacturing Company Ltd TSM failed to keep up with Nvidia's demand for AI chip packaging. 

The demand-supply gap signals an untapped opportunity for the likes of Samsung Electronics Co, Ltd SSNLF, as per analysts.

Also in the semiconductor space, Apple Inc AAPL, Samsung, Intel Corp INTC, along with Nvidia are eyeing stakes in Softbank Group Corp SFTBF SFTBY backed British chip designer Arm when it goes public in September.

The companies mentioned above are also significant customers of the chip designer.

Arm looks to sell each company stakes worth "a few percent each" to help stabilize its stock price. 

In 2022, Arm shared its plans to go public after Nvidia's $40 billion takeover deal fell prey to regulatory opposition.

Due to Nvidia's demand-supply anomalies, the industry considers Advanced Micro Devices, Inc AMD as another beneficiary of AI chips.

Price Action: NVDA shares traded lower by 2.12% at $444.54 on the last check Tuesday.