NVIDIA Corp. NVDA is facing renewed market scrutiny as Jim Cramer questioned the stock’s trading pattern on Thursday, amid growing concerns over China sanctions and positive earnings from key supplier Taiwan Semiconductor Manufacturing Co. TSM.
What Happened: “When will they let NVDA go higher?” CNBC’s Cramer posted on X, highlighting the stock’s recent pressure amid TSMC’s strong fourth-quarter performance. TSMC reported earnings of $2.24 per share on revenue of $26.88 billion, exceeding estimates by 3.70% and 1.91% respectively.
The commentary comes as Nvidia grapples with a $10 billion setback after major tech customers, including Microsoft Corp. MSFT, Amazon.com Inc. AMZN, and Meta Platforms Inc. META, postponed orders for its Blackwell GB200 data center racks due to overheating issues.
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Why It Matters: Adding to the challenges, President Joe Biden‘s administration has imposed new semiconductor export restrictions to China, potentially affecting up to 50% of Nvidia’s chip market, according to D.A. Davidson analyst Gil Luria. This follows Wednesday’s action placing several Chinese entities on a U.S. trade restriction list, including AI developer Zhipu AI.
“Geopolitical tensions, particularly between the U.S. and China, have significantly impacted the semiconductor industry,” noted Defiance ETFs CEO Sylvia Jablonski. “Each time we’ve heard a report about a potential U.S. ban on semiconductors from the White House, we’ve seen NVDA and all other semiconductor stocks fall.”
Despite these headwinds, the quantum computing sector shows promise, with Microsoft calling for businesses to become “quantum-ready” by 2025.
Nvidia plans to host a “Quantum Day” at its upcoming GTC conference in March, signaling a long-term commitment to the technology despite CEO Jensen Huang‘s view that practical quantum computing remains decades away.
Price Action: Nvidia’s stock closed at $133.62 on Thursday, down 1.92% for the day. In after-hours trading, the stock rose slightly by 0.16%, according to data from Benzinga Pro.
| Year | Performance |
|---|---|
| 2024 | +170% |
| 2023 | +239% |
| Year-to-date | – 3.39% |
Nvidia has a consensus price target of $170.18, with a high of $220 and a low of $120. Recent ratings from HSBC, Rosenblatt, and Benchmark give an average target of $198.33, implying a 48.20% upside.
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