What's Going On With Nvidia Stock Wednesday?

Artificial intelligence kingpin Nvidia Corp NVDA is facing testing times courtesy of U.S. semiconductor sanctions on China and intensifying competition from the likes of Intel Corp INTC and Advanced Micro Devices, Inc AMD.

Just as the chip designer recuperates from the loss of orders over $5 billion in 2024 from China's leading AI and cloud-computing companies, including Alibaba Group Holding Limited BABA, separate reports indicate that South Korean internet conglomerate Naver Corp NHNCF has replaced the leading chip supplier of its AI server for its map service from Nvidia to Intel. Naver is also known as 'the Google of South Korea.'

Naver's AI server switch coincides with Nvidia's GPU price hikes and a global shortage of its GPUs as Nvidia's key supplier, Taiwan Semiconductor Manufacturing Company Ltd's TSM packaging process lines fail to deliver in the face of the AI frenzy.

The price of an AI accelerator using Nvidia's GPUs doubled to 80 million won ($59,193) from about 40 million won earlier in 2023. Meanwhile, the lead time for Nvidia's GPU-based accelerators has reached 52 weeks, making it even harder for a system upgrade.

Intel and Naver are collaborating to compete against Nvidia, which commands an estimated 80% market share in the global AI processor market. Analysts expect the tie-up to lead to a further diminishing of Nvidia's influence in the AI processor market.

Microsoft Corp MSFT has reportedly tapped Nvidia rival AMD to help bolster the expansion into AI processors.

Price Action: NVDA shares traded higher by 0.69% at $410.68 on the last check Wednesday.