Where there’s a will there’s a way, right? That seems to be Nvidia’s (NASDAQ:NVDA) way of thinking around the restrictions placed on selling its products to China.
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As per reports last week from a Chinese news source, Nvidia is set to launch three new chips specifically designed for the Chinese market, which apparently comply with the performance density criteria outlined in the latest set of restrictions regarding the shipment of AI chips.
Recall, last month the semi giant said the new export limitations imposed by the U.S. government would hinder its ability to sell two modified advanced AI chips, namely the A800 and H800. These chips were specifically developed for the Chinese market and adhere to the export regulations put in place last year. Additionally, the company would no longer be able to sell one of its best-in-class gaming chips, the RTX 4090.
The announcement of these new chips, called the HGX H20, L20 PCIe, and L2 PCIe, is expected to take place around November 16, according to sources cited by the Star Market Daily news outlet.
Nvidia’s attempts to get around this issue makes sense to Deutsche Bank analyst Ross Seymore, who notes: “The cat and mouse game continues between the US government and NVDA’s AI aspirations in China, and we are not surprised by NVDA’s continued efforts to serve this market despite restrictions (and still adhering to them).”
Still, it wouldn’t be unexpected if these chips incorporate a tradeoff involving “material efficiency loss” (and potentially resulting in higher prices that could benefit Nvidia), despite indications that one of the chips surpasses the performance levels of the H100 on certain metrics.
“While we expect no change to NVDA fundamentals in the near-term,” Seymore summed up, “this news removes some of the uncertainty around the long-term demand destruction these rules had originally posed.”
Interestingly, however, Seymore is the only Street analyst sitting on the NVDA fence right now. His Hold (i.e., Neutral) rating on the stock is backed by a $560 price target, implying shares will gain 13% over the coming months. (To watch Seymore’s track record, click here)
Seymore’s take aside, all 37 other recent analyst reviews are positive, naturally making the consensus view here a Strong Buy. At $647.32, the average target makes room for 12-month returns of 30%. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
