By Adam Clark
Nvidia stock was rising early Tuesday. The chip maker looks to be finding its footing in the face of a proposed expansion of curbs on exports of artificial-intelligence technology.
Nvidia shares were up 2.2% at $136.22 in premarket trading. The stock fell 2% on Monday
The Biden administration on Monday outlined AI chip restrictions that would apply caps on U.S. exports to more than 120 countries beyond China, which is already subject to strict limits.
"Nvidia...have sized 'Sovereign AI' as a low-double-digit billion-dollar revenue effort this year. Some portion of that total likely includes sales to "Tier 2" countries, which could face new restrictions if the new rules are enacted and enforced," said John Belton, portfolio manager at Gabelli Funds.
The new rules won't take effect until after a 120-day comment period. As Barron's has written, the incoming administration of President-elect Donald Trump could revoke or change the rules.
"The long implementation period and pending changeover in administration opens up the possibility for the specifics of the rule to be tweaked, but our long-term outlook remains unchanged; namely, that the scope and aggressiveness of U.S. controls on semiconductors and AI technologies will likely continue to increase in the coming years," wrote Raymond James analyst Ed Mills in a research note.
Apart from the chip-export curbs, Nvidia is also reported to be facing some issues with ramping up manufacturing of its GB200 NV liquid-cooled rack systems, which contain dozens of its Blackwell chips networked together.
"Current estimates suggest that GB200 NVL72 shipments in 2025 could reach roughly 25,000-35,000 racks -- significantly below the optimistic range of 50,000-80,000 racks from last year," wrote Ming-Chi Kuo, a Taiwan-based analyst for TF International Securities, in a research note on Monday.
Among other chip makers, Advanced Micro Devices was rising 1.2% and Broadcom was gaining 2.3% in premarket trading.
Write to Adam Clark at adam.clark@barrons.com
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January 14, 2025 05:07 ET (10:07 GMT)
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