Nvidia stock has trended mostly sideways for the past week as investors await the AI chipmaker's fiscal first-quarter earnings report next week. The tech giant's stock wavered on Wednesday.
Nvidia's announcements at the Computex trade show in Taiwan earlier this week did little to sway investors. But Wall Street analysts were generally pleased with what they heard at the conference from Nvidia Chief Executive Jensen Huang.
In a keynote speech, Huang discussed developments in artificial intelligence and AI computing systems. He also addressed quantum computing, robotics and digital twins for factory simulation.
Huang introduced NVLink Fusion technology that can incorporate chips from other companies, including competitors in central processing units and AI chips.
NVLink Fusion shows that Nvidia is listening to its customers, many of whom have been asking for something like that, Citi analyst Atif Malik said in a client note. He rates Nvidia stock as buy with a price target of 150.
On the stock market today, Nvidia stock fell 1.9% to close at 131.80. Earlier in the session, it was up as much as 2.2% before it reversed.
Nvidia stock is in a 20-week consolidation pattern with a buy point of 153.13, according to IBD MarketSurge charts. However, it could be forming a handle, which would offer a lower entry point.
TD Cowen analyst Joshua Buchalter said Nvidia stock remains his "top compute pick." However, he doubts the company's fiscal Q1 report will move Nvidia shares much.
"Recent earnings calls have not been a meaningful positive catalyst for the stock even with consistently positive numbers," he said in a client note Tuesday. The Santa Clara, Calif.-based company will release its quarterly results after the market close on May 28.
Analysts polled by FactSet expect Nvidia to report earnings of 88 cents a share on sales of $43.26 billion. That would translate to year-over-year growth of 44% in earnings and 66% in revenue. Nvidia's fiscal Q1 report will include a charge of up to $5.5 billion for H20 inventory that the company was blocked from selling to China in April.
Huang Criticizes U.S.-China Trade Restrictions
In other news, Huang told reporters at Computex that U.S. export controls limiting the sale of advanced chips to China have been a failure. He commended President Donald Trump for rescinding the Biden administration's AI Diffusion Rule, which would have further restricted sales, the Wall Street Journal reported.
Trade barriers have made China push ahead with building its own AI technology and Nvidia has lost market share to domestic competitors in the country over the past four years, Huang said. He said he hoped that Nvidia soon can regain access to the Chinese market.
However, a top White House official told Bloomberg Wednesday that Trump administration will maintain efforts to keep AI technology out of China's hands.
Sriram Krishnan, White House senior policy adviser for artificial intelligence, said the Trump administration still sees a security risk from widening AI chip exports to China.
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