Advanced Micro Devices (AMD) and Nvidia (NVDA) stocks were down on Monday alongside news of increasing GPU prices in China. The price of GPUs has been on the rise over the past year, largely due to the AI boom. This has created a shortage for critical components used in GPU manufacturing, such as DRAM.
With these shortages came GPU price increases from the semiconductor companies, as well as rising market prices. Those prices have spiked again in China, making it more costly to obtain GPUs from the two biggest manufacturers in the world. For example, Wccftech reported that customers in China are now paying about 4,575 yuan for an RTX 5090 D, a region-specific variant with limited AI abilities. That’s roughly 88% more than the card’s MSRP of 2,435 yuan.
Of course, it isn’t just Chinese consumers who are dealing with inflated GPU prices. For example, the ASUS (ASUUY) TUF Gaming GeForce RTX 5090 32GB OC Edition is being sold for $3,779.99, which is a significant 89% markup over Nvidia’s $1,999 MSRP for the RTX 5090. This shows that consumers in the U.S. are also dealing with similarly inflated GPU prices.
Do Rising GPU Prices Explain Why AMD and NVDA Stocks Are Down Today?
No. It isn’t the rising price of GPUs that’s dragging down AMD and NVDA shares on Monday. Instead, investors can blame a larger AI stock selloff that’s underway today. The catalysts for this selloff are two pieces of news from China.
First up are increasing tensions between the U.S. and China. The U.S. has accused China of stealing AI technology and said it will place sanctions and other restrictions on the country. This prompted China to warn that it will retaliate against any actions the U.S. takes against it.
Second is reports that China has started mass production of its own DUV chipmaking tools. This could allow the country to pivot away from U.S. chip manufacturers and make its own AI chips.
Are AMD and NVDA Stocks Worth Buying Today?
Turning to Wall Street, AMD and NVDA both have consensus Strong Buy ratings from analysts. They also each have high upside potential. AMD’s upside sits at 18.34% alongside an average price target of $570.38, while Nvidia’s upside is set at 57.4% with an average price target of $309.94. (See AMD & NVDA Stock Forecasts)
