Nvidia Stock: Two months left before the next event, could it significantly affect market position?
Get ready, AI enthusiasts! The Nvidia stock might see some major shifts as early as May - here's the lowdown on what you need to know now.
The Nvidia stock's journey this year has been a rollercoaster ride, despite a remarkable 200% growth in 2023 and 2024. The ride hit a bump starting the new year, with a 20% decline. Things, however, appear to be running smoothly for this market darling, with the company knocking its quarterly figures out of the park. Yet, the arising geopolitical uncertainties, U.S. President Trump's trade tariffs, and AI competition from China have left investors uneasy.
According to a recent report by financial portal "Seeking Alpha", these worries may find resolution soon...
What lies in store for the Nvidia stock on that May day?
The report hints at an announcement by experts at Bank of America, who suggest a turbulent ride for the Nvidia stock until May 15. The reasoning behind this prediction?
On May 15, the U.S. government plans to implement its new phased AI chip export restrictions. As per the announcement, these restrictions could limit access to AI chips to a select group of 18 countries. This decision could shake things up - including for chipmaker Nvidia.
"The potential repercussions stretch far and wide, with the Nvidia stock remaining unpredictable until May 15, often referred to as 'the day of liberation,' and potentially serving as a catalyst, as the consequences might then become evident in the stock price," the announcement states.
So, what happens to the Nvidia stock on May 15?
One thing's for certain: On May 15, investors will gain a clearer understanding of the upcoming measures, the severity of these measures, which countries will be affected, and Nvidia's reliance on exporting chips to those countries.
It's worth noting that Nvidia's direct share in the Chinese market, which may be impacted by the new AI restrictions, is relatively small, standing at around ten percent for H20 chips. A significantly larger chunk of China business comes from other sectors like gaming graphics cards, tech for automobiles, and specialized computers forwork. These areas are likely to remain untouched by possible restrictions.
Although Bank of America retains its optimism and maintains a buy recommendation with a price target of $200, there's the possibility of an upside potential of 78%. The analysts are confident that the stock will recuperate as soon as geopolitical concerns are clarified for investors. "We believe the stock presents an exceptional opportunity for one of the most exceptional and high-quality technology companies leading the largest and fastest-growing long-term trends," the experts opine.
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Caveat Emptor: The CEO and majority shareholder of publisher Boersenmedien AG, Mr. Bernd Förtsch, has taken positions in the financial instruments or related derivatives mentioned in the publication, which may gain from the price movement resulting from the publication.
Disclaimer: The author possesses positions in the following financial instruments or related derivatives mentioned in this publication, which may benefit from any price movement resulting from the publication: Nvidia.
The potential phased AI chip export restrictions announced by the U.S. government on May 15 might affect Nvidia's stock, as the restrictions could limit access to AI chips for a select group of countries. On May 15, investors will gain a clearer understanding of the upcoming measures and their impact on Nvidia's export business. Despite this uncertainty, analysts at Bank of America maintain a buy recommendation for Nvidia, with a price target of $200, and suggest that the stock presents an exceptional opportunity due to its leading position in technology and growth trends.
