NVDA (NASDAQ: NVDA) Produces New Chips; Is Now the Right Time to Buy This Stock?
Stock Analysis & Ideas

NVDA (NASDAQ: NVDA) Produces New Chips; Is Now the Right Time to Buy This Stock?

Story Highlights

Nvidia shares are trading higher in the early hours after the company confirmed that it has started production of new chips for customers in China.

Nvidia (NASDAQ: NVDA) shares are trading higher in the early hours of today following the news that it will start offering new chips to its Chinese customers, adhering to the new U.S. regulations.

The company started the production of the new graphics-processing chip, known as the A800. The A800 will replace the older A100 versions, which was also one of the well-known products widely used by many tech giants in China. A800 will exhibit the same performance but will have a lower bandwidth, thereby complying with imposed restrictions.

The news comes as a huge relief to the company’s revenues, which were negatively impacted by the recently imposed U.S. export restrictions on high-end AI chips to China. Notably, NVDA has a high percentage of its revenues attributed to China and Hong Kong.

The management stated, “The A800 meets the US government’s clear test for reduced export control and cannot be programmed to exceed it.”

In yet another story, reported by Bloomberg, a well-known American investor named Cathie Wood sold shares of NVDA stock. Last week, her investment management firm, Ark Invest, sold a total of around 1,92,000 NVDA shares. According to the firm’s trading disclosures, Ark Innovation ETF sold 167,914 shares on November 4, while Ark Next Generation Internet ETF sold 24,423 Nvidia shares on November 3.

What Is a Good Price for NVDA Stock?

As per TipRanks, analysts are both cautious and optimistic about the Nvidia stock and have a Moderate Buy consensus rating, which is based on 23 Buys and nine Holds. Nvidia’s average price forecast of $195.52 implies 36.7% upside potential.

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Concluding Thoughts – NVDA Stock Could Be a Buy

NVDA stock has lost half of its market capitalization over the past year. Notably, it is trading far lower than its all-time high of $345 levels seen in 2021.

The new-chip announcement speaks of the company’s determination to stay competitive, no matter what. While the stock has regained 22% over the past month, investors may want to hoard the stock ahead of its Q3 earnings scheduled to be released on November 16. Interestingly, NVDA stock has a strong track record of reporting upbeat earnings. It has outperformed the street’s expectations in all the preceding eight reported quarters.

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