What's Going On With Nvidia Stock Tuesday?

Nvidia Corp NVDA stock is trading higher Tuesday as reports of a supply chain crisis affecting the demand-supply dynamics of the artificial intelligence-driven frenzy.

The depreciating yen is causing a surge in the prices of Nvidia's semiconductor devices in Japan, impacting generative AI developers. 

GDEP Advance, an official Nvidia sales partner, increased the price of the H100 graphics processing unit by 16% in September, attributing the hike to the yen's decline. 

The GPU, essential for artificial intelligence services, now costs 5.44 million yen ($36,300), marking a 700,000 yen increase, Nikkei Asia reports. 

Despite the price hike, the demand remains strong as companies in the AI sector are seemingly willing to bear the increased costs.

The yen's value has dropped to nearly 150 to the dollar, pushing the H100's price to its highest since October 2022. 

This GPU is now 2.2 times more expensive than the previous generation A100, priced at 2.42 million yen. 

Nvidia, which dominates 80% - 90% of the global market for data center GPUs, has kept the dollar price of the H100 unchanged. 

Previous reports indicated China also seeing a thriving underground market for Nvidia A100 artificial intelligence chips made by Nvidia, which the U.S. has banned in China. 

The chips are available at double the usual price of $20,000 apiece due to higher demand from app developers, startups, researchers, gamers, and local Chinese authorities.

Meanwhile, Microsoft Corp's MSFT CTO, Kevin Scott, has acknowledged the improvement in Nvidia's AI GPU supply chain and highlighted the increasing availability of these essential chips as Microsoft's significant investment in generative AI, particularly in OpenAI's ChatGPT language model.

Scott also spotlighted Advanced Micro Devices, Inc's AMD upcoming contributions to the AI sector.

With Nvidia aiming to ship 1.5 million - 2 million H100s in 2024, the AI industry will likely enhance accessibility to the critical hardware necessary for advancing AI developments.

Price Action: NVDA shares traded higher by 0.50% at $450.06 on the last check Tuesday.

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