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NVIDIA (NVDA) Reportedly Plans to Launch New Chips for China
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NVIDIA Corporation (NVDA - Free Report) developed three new artificial intelligence (AI) chips specifically designed for the Chinese market, Financial Times reported on Thursday, citing leaked documents and four individuals familiar with the matter.
The British daily business newspaper revealed that the three high-end AI chips are called H20, L20 and L2, per the leaked documents. It also stated that NVIDIA could probably announce the release of the chips as early as next week.
According to the report, the new suite of AI chips has been designed in a way that can bypass the restrictions imposed on China-bound export by the U.S. government. Notably, over the past year, President Joe Biden's administration has been imposing trade restrictions to restrict China from getting its hands on cutting-edge technologies that can strengthen its military.
Last year, the U.S. government restricted NVIDIA from selling its A100, A100X and H100 integrated circuits to China and Russia. It also banned the company from exporting DGX or other systems using A100 or H100 integrated circuits.
In October 2023, the Biden administration imposed fresh restrictions on the sale of AI chips and manufacturing equipment to China. The newly expanded restrictions have blocked NVIDIA from selling two AI chips — A800 and H800 — specifically created for the Chinese market following the last year’s export curb. The blocked chip sale list also includes one of the company’s top gaming chips, RTX 4090, as well as L40 and L40S.
However, the expanded restrictions are likely to hurt NVIDIA’s business in China. In a filing with the Securities and Exchange Commission, the company revealed that it may be forced to discontinue its business operations from countries on the U.S. government’s export restriction list. The rules are expected to impact NVDA’s ability to support its existing customers and complete the development of certain products in a timely manner.
However, considering the strong demand for its products worldwide, the company believes that the new restrictions will have no meaningful impact on its financial performance in the near term.
NVIDIA has been on a remarkable run since the beginning of 2023, with its share prices soaring 221% year to date (YTD) on hopes that the company will be a prime beneficiary of growing investments in generative AI.
Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. It is driven by a large language model, which means that it uses many data to understand and generate conversations.
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started. The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
However, generative AI requires vast knowledge to create content. It also needs huge computational power. As a result, enterprises looking to create generative AI-based applications will need to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. During the first-quarter fiscal 2024 earnings call, the company’s CEO Jensen Huang stated that the existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which are expanding their footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its third-quarter fiscal 2024 revenues to reach $16 billion from $5.93 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Zacks Rank & Other Stocks to Consider
Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for CyberArk’s fourth-quarter 2023 earnings has been revised 3 cents northward to 43 cents per share in the past seven days. For 2023, the same has moved north 25 cents to 79 per share in the past seven days.
CyberArk’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, delivering an average surprise of 60.3%. Shares of CYBR have risen 40.2% YTD.
The Zacks Consensus Estimate for Palo Alto Networks' first-quarter fiscal 2024 earnings has remained unchanged at $1.16 per share in the past 60 days. For fiscal 2024, the same has remained unchanged at $5.34 per share in the past 60 days.
Palo Alto Networks’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, delivering an average surprise of 22.2%. Shares of PANW have rallied 74.2% YTD.
The Zacks Consensus Estimate for Microsoft's second-quarter fiscal 2024 earnings has moved upward by 11 cents to $2.74 per share in the past 30 days. For fiscal 2024, the same has moved north 21 cents to $11.11 per share in the past 30 days.
Microsoft’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, delivering an average surprise of 7.8%. Shares of MSFT have risen 50.4% YTD.
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NVIDIA (NVDA) Reportedly Plans to Launch New Chips for China
NVIDIA Corporation (NVDA - Free Report) developed three new artificial intelligence (AI) chips specifically designed for the Chinese market, Financial Times reported on Thursday, citing leaked documents and four individuals familiar with the matter.
The British daily business newspaper revealed that the three high-end AI chips are called H20, L20 and L2, per the leaked documents. It also stated that NVIDIA could probably announce the release of the chips as early as next week.
According to the report, the new suite of AI chips has been designed in a way that can bypass the restrictions imposed on China-bound export by the U.S. government. Notably, over the past year, President Joe Biden's administration has been imposing trade restrictions to restrict China from getting its hands on cutting-edge technologies that can strengthen its military.
Last year, the U.S. government restricted NVIDIA from selling its A100, A100X and H100 integrated circuits to China and Russia. It also banned the company from exporting DGX or other systems using A100 or H100 integrated circuits.
In October 2023, the Biden administration imposed fresh restrictions on the sale of AI chips and manufacturing equipment to China. The newly expanded restrictions have blocked NVIDIA from selling two AI chips — A800 and H800 — specifically created for the Chinese market following the last year’s export curb. The blocked chip sale list also includes one of the company’s top gaming chips, RTX 4090, as well as L40 and L40S.
However, the expanded restrictions are likely to hurt NVIDIA’s business in China. In a filing with the Securities and Exchange Commission, the company revealed that it may be forced to discontinue its business operations from countries on the U.S. government’s export restriction list. The rules are expected to impact NVDA’s ability to support its existing customers and complete the development of certain products in a timely manner.
However, considering the strong demand for its products worldwide, the company believes that the new restrictions will have no meaningful impact on its financial performance in the near term.
NVIDIA Corporation Price and Consensus
NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote
Investment in GenAI to Drive Growth
NVIDIA has been on a remarkable run since the beginning of 2023, with its share prices soaring 221% year to date (YTD) on hopes that the company will be a prime beneficiary of growing investments in generative AI.
Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. It is driven by a large language model, which means that it uses many data to understand and generate conversations.
Though AI has been around for years, the meteoric rise of OpenAI’s ChatGPT has captivated the world’s attention on the power of generative AI to augment human capability, suggesting that the AI boom may just get started. The adoption of ChatGPT among enterprises has already proven generative AI technology’s usefulness across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
However, generative AI requires vast knowledge to create content. It also needs huge computational power. As a result, enterprises looking to create generative AI-based applications will need to upgrade their existing network infrastructure.
NVIDIA’s next-generation chips with high computing power can be the top choice for enterprises. During the first-quarter fiscal 2024 earnings call, the company’s CEO Jensen Huang stated that the existing data centers are insufficiently equipped to handle growing AI workloads.
NVIDIA’s GPUs are already being applied in AI models, which are expanding their footprint in untapped markets like automotive, healthcare and manufacturing. The generative AI revolution is likely to create huge demand for its next-generation high computing powerful chips. NVIDIA expects its third-quarter fiscal 2024 revenues to reach $16 billion from $5.93 billion in the year-ago quarter, largely driven by surging AI investments across the data center end market.
Zacks Rank & Other Stocks to Consider
Currently, NVIDIA sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks from the broader technology sector are CyberArk Software (CYBR - Free Report) , Palo Alto Networks (PANW - Free Report) and Microsoft (MSFT - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CyberArk’s fourth-quarter 2023 earnings has been revised 3 cents northward to 43 cents per share in the past seven days. For 2023, the same has moved north 25 cents to 79 per share in the past seven days.
CyberArk’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, delivering an average surprise of 60.3%. Shares of CYBR have risen 40.2% YTD.
The Zacks Consensus Estimate for Palo Alto Networks' first-quarter fiscal 2024 earnings has remained unchanged at $1.16 per share in the past 60 days. For fiscal 2024, the same has remained unchanged at $5.34 per share in the past 60 days.
Palo Alto Networks’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, delivering an average surprise of 22.2%. Shares of PANW have rallied 74.2% YTD.
The Zacks Consensus Estimate for Microsoft's second-quarter fiscal 2024 earnings has moved upward by 11 cents to $2.74 per share in the past 30 days. For fiscal 2024, the same has moved north 21 cents to $11.11 per share in the past 30 days.
Microsoft’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, delivering an average surprise of 7.8%. Shares of MSFT have risen 50.4% YTD.