25 May 2023

Escalating chip war against China from the U.S. could cause "enormous damage" to the American tech industry,

Graphics-chip maker Nvidia crushed Wall Street's targets for its fiscal first ... The U.S. tech industry is at risk of "enormous damage" from the escalating ...
Investor's Business Daily · JUSTIN NIELSEN · 9 hours ago

Nvidia close to being first trillion-dollar chip firm on AI use 

The logo of Nvidia Corporation

US company dominates market for chips used to power ChatGPT and many similar services, a key reason behind its stock surge.

The logo of Nvidia Corporation

"Nvidia Corp stock has soared about 26 percent, taking it closer to a market value of $1 trillion after the chip designer’s stellar revenue forecast showed that Wall Street has yet to price in the game-changing potential of artificial intelligence.

Thursday’s surge added to a more than two-fold rise in the stock this year and was set to increase Nvidia’s value by about $196bn to nearly $951bn, putting it on course for the largest single-day value gain for a US firm.

That market capitalization makes Nvidia twice the size of the second-largest chip firm, Taiwan’s TSMC. In the United States, it trails only the trillion-dollar value companies Apple Inc, Alphabet Inc, Microsoft Corp and Amazon.com Inc.

The rosy earnings also sparked a rally in the chip sector and for AI-focused firms, lifting stock markets from Japan to Europe. In the US, Big Tech companies other than Amazon rose 0.7 percent to 3.5 percent while Advanced Micro Devices Inc jumped 10 percent.

Analysts rushed to raise their price targets on Nvidia stock with 27 lifting their view on the idea that all roads in AI lead to the company because it dominates the market for chips used to power ChatGPT and many similar services.

The mean price target has more than doubled this year. At the highest view, a $644.80 price target from Elazar Advisors, Nvidia would have a value of $1.59 trillion, around that of Alphabet.

“In the 15+ years we have been doing this job, we have never seen a guide like the one Nvidia just put up with the second-quarter outlook that was by all accounts cosmological and which annihilated expectations,” Stacy Rasgon of Bernstein Research said.

Nvidia, the fifth-most valuable US company, on Wednesday projected quarterly revenue more than 50 percent above the average Wall Street estimate and said it would have more supply of AI chips in the second half to meet a surge in demand.

CEO Jensen Huang said $1 trillion of current equipment in data centres would have to be replaced with AI chips as generative AI is applied into every product and service.

The results bode well for Big Tech companies, which have shifted focus to AI on hopes the technology would help attract demand at a time their profit engines of digital advertising and cloud computing are under pressure from a weak economy.

Some analysts said Nvidia’s results show that the generative AI boom could be the next big driver of growth.

“We’re really just seeing the tip of the iceberg. This really could be another inflection point in technological history, such as the internal combustion engine or the internet,” said Derren Nathan, head of equity analysis at Hargreaves Lansdown.

SOURCE: REUTERS


 19:31, 25-May-2023

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Nvidia CEO warns chip war would cause 'enormous damage' to U.S. tech

CGTN
A file photo of Jensen Huang, chief executive officer of Nvidia Corp. /CFP

A file photo of Jensen Huang, chief executive officer of Nvidia Corp. /CFP

The escalating chip war against China from the U.S. could cause "enormous damage" to the American tech industry, said semiconductor giant Nvidia's CEO Jensen Huang in an interview with the Financial Times published on Wednesday.

Noting that China made up roughly one-third of the U.S. tech industry's market, Huang said there is no substitution for it.

"If we are deprived of the Chinese market, we don't have a contingency for that. There is no other China, there is only one China," Huang said in the interview.

Losing the Chinese market, he said, would mean that U.S. semiconductor manufacturing facilities would be running at overcapacity and there would be "enormous damage to American companies."

As the world's most valuable listed semiconductor company, Nvidia specializes in graphics chips that have long been coveted by gamers but have become engines for the kind of complex computing power required in artificial intelligence (AI) processing.

Nvidia specializes in producing graphics chips. /CFP

Nvidia specializes in producing graphics chips. /CFP

Since August last year, the U.S. has banned Nvidia from exporting two advanced computing chips to China. The ban covers the company's A100 and flagship H100 chips, which are powerful enough to facilitate AI processing.

  • The company flagged a $400 million loss resulting from the restriction at the time.

Huang said the ban resulted in the company having "our hands tied behind our back" when it came to trading advanced chips with China, one of its top markets.

Huang noted that Chinese companies are making chips locally since they are cut off from the U.S.-made ones.

The recent growing excitement surrounding AI has been boosting demand for chips, with Nvidia having seen its market capitalization more than double this year.

Shares in the company soared more than 25 percent Wednesday after an earnings report showed the AI trend is fueling demand for its sophisticated chips.

Nvidia said it expected revenue of about $11 billion in the current quarter, which seemed to drive investor enthusiasm for its shares.

(With input from AFP)


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