Nvidia continues to grow, but the uncertainty in China hinders prospects

Nvidia actions decreased on Wednesday when the destination of his business in China was uncertain, involved in the commercial war of Washington and Beijing.

CEO Jensen Huang hopes to get the permission to restart the Nvidia chip to sell in China after closing an agreement with the President of the United States Donald Trump to pay the commissions to the United States government. However, without formal rules in force in the United States and with doubt if Chinese regulators will discourage the purchase of Nvidia chips, the leading company in the artificial intelligence market has excluded potential sales in China from forecasts for the current quarter.

Consequently, there was only a little encouraging perspective that, although it is still absolute in dollars and slightly above the analysts’ estimates, disappointed investors rested significant results and dropped the shares of 3.2% in the negotiations after closing the negotiation session. The drop in shares has reduced about $ 110 billion from the market capitalization of $ 4.4 trillions of nvidia dollars.

“The largest bottleneck of Nvidia is not silicon, its diplomacy,” said Michael Ashley Schulman, director of investments in Running Point Capital.

The chip manufacturer includes a turnover of $ 54 billion, about 2%, in the third quarter, compared to the average estimate of $ 53.14 billion in analysts, according to the data compiled by LSEG.

Nvidia also claimed not to include the shipments of H20 chips in China in its estimates, although he received some licenses at the beginning of this month to sell them. If geopolitical issues decrease and the company receives more orders, Nvidia has declared that it could add $ 2 billion to $ 5 billion in H20 chip revenue in the third quarter.

Although the Nvidia forecast were a little more moderate than expected, any sale to the next quarter would have been added to the perspective, Ben Bajarin, CEO of the Creative Strategies technological consultancy company said.

However, the demand has increased to advanced NVIDIA chips that can quickly process large quantities of data used by the applications of generative while companies take place to master new technology.

Nvidia also claimed to have authorized additional $ 60 billion in a deed of shares.

Source: Terra

Rose

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