Nvidia to develop cheaper Blackwell chip for China
Arjun Kharpal talks to Karen Tso and Julianna Tatelbaum on reports Nvidia will manufacture cheaper Blackwell AI chips aimed at bypassing U.S. chip export restrictions
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
39 minutes ago
- Yahoo
Big Tech Is Back in S&P 500 Driver's Seat as Profit Engines Hum
(Bloomberg) -- The same technology giants that helped drag the S&P 500 to the brink of a bear market in April are giving the recovery in US equities some legs. Billionaire Steve Cohen Wants NY to Expand Taxpayer-Backed Ferry Where the Wild Children's Museums Are Now With Colorful Blocks, Tirana's Pyramid Represents a Changing Albania The Economic Benefits of Paying Workers to Move NYC Congestion Toll Brings In $216 Million in First Four Months Nvidia Corp. put a bow on a better-than-expected earnings season for Big Tech last week by delivering a strong outlook for revenue, despite US restrictions on sales of its chips in China. With Nvidia and Microsoft Corp. rallying back to the cusp of record highs, traders are betting the group is poised to lift the broader market. 'I feel really good about tech coming out of this earnings season,' said Brett Ewing, chief market strategist at First Franklin Financial Services. 'There's still more gas in this tank.' The S&P 500 Index is within 4% of its February record high with much of the rebound being fueled by easing tensions between the US and its trade partners, as well as Big Tech results that showed demand for things like cloud-computing services, software, electronic devices and digital advertising remain intact even as the threat of higher tariffs on sales lingers. Tesla Inc. is up 56% since the benchmark bottomed out on April 8, while Nvidia and Microsoft have gained 40% and 30%, respectively. As a result, a Bloomberg gauge of the so-called Magnificent Seven stocks — Nvidia, Microsoft, Tesla, Apple Inc., Alphabet Inc., Inc. and Meta Platforms Inc. — is outperforming the S&P 500 over the past eight weeks — a critical shift for the benchmark considering the group accounts for a third of the index. The cohort is responsible for nearly half of the S&P 500's 19% rally from the April bottom, according to data compiled by Bloomberg. Despite the strong performance, the group is still trailing the S&P 500 for the year — a rare occurrence in the past decade. Shares of Apple and Amazon, which face greater risks from tariffs due to products imported, are weighing the cohort down and lag the overall market. 'Buying the tech dip will be a theme throughout the year,' said Ewing. 'There's still a lot of money on the sidelines and it has to be put to work.' Recovery Risks Tariffs and other Trump policies remain a big market overhang. On Friday, the benchmark sank more than 1% after Trump accused China of violating an agreement with the US to ease tariffs and a news report that the US plans to place broader restrictions on the country's tech sector. The S&P 500 managed to recoup most of those losses by the end of the day. Another hurdle will be Big Tech's hefty valuations. Bloomberg's Magnificent Seven gauge is priced at 30 times projected profits, according to data compiled by Bloomberg. Meanwhile, the S&P 500 is trading at 21 times earnings projected over the next 12 months, up from a low of 18 times in April and well above the average of 18.6 times over the past decade. Barry Knapp, managing partner at Ironsides Macroeconomics, said he's wary of Big Tech's rich valuations even though the group looks attractive from a fundamental perspective. He's 'modestly underweight' the sector and has relatively more exposure to industrials, materials, energy and financials in anticipation of a capital spending recovery in the second half of the year. 'Being overweight on tech here borders on recklessness, because you would have such a huge proportion of your portfolio in this one sector, and that leaves you vulnerable,' Knapp said. Market Catalyst Truist Advisory Services' Keith Lerner, however, sees Big Tech leading the broader market higher in the last half of 2025 with spending on artificial intelligence computing continuing to climb. Meta Platforms raised its forecast for capital expenditures this year and Microsoft said it plans to increase spending in its next fiscal year, alleviating concerns that the companies might pull back on such outlays after two years of largesse. 'Our view is that earnings could still be maybe flatter but likely have less downside than what we would have thought heading into the earnings season,' said Lerner, who is Truist's co-chief investment officer and chief market strategist. The Magnificent Seven profit estimates in 2025 have stayed steady over the past two months. The group is projected to deliver profit growth of 15%, roughly in-line with analysts' expectations before the reporting season began in mid-April and twice the expansion projected for the S&P 500, according to data compiled by Bloomberg Intelligence. 'Investors are going to be drawn back toward these names with secular growth,' said Lerner. Tech 'could be that catalyst later on to actually see the market re-accelerate later in the year.' YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? Will Small Business Owners Knock Down Trump's Mighty Tariffs? Trump Considers Deporting Migrants to Rwanda After the UK Decides Not To ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
an hour ago
- Bloomberg
Big Tech Is Back in S&P 500 Driver's Seat as Profit Engines Hum
The same technology giants that helped drag the S&P 500 to the brink of a bear market in April are giving the recovery in US equities some legs. Nvidia Corp. put a bow on a better-than-expected earnings season for Big Tech last week by delivering a strong outlook for revenue, despite US restrictions on sales of its chips in China. With Nvidia and Microsoft Corp. rallying back to the cusp of record highs, traders are betting the group is poised to lift the broader market.
Yahoo
2 hours ago
- Yahoo
What Wall Street might be missing on Nvidia
Decoding a public company's earnings report in the 24 hours after its release could be maddening. Here's why. A company that beats on sales and earnings estimates could see its stock pounded after one slip of the tongue from a CEO or CFO on the earnings call (which you can now listen in on with Yahoo Finance). Look at the 20% plunge Gap's (GAP) stock took on Friday after the company reported across-the-board beats but issued a tariff warning many should have seen coming. Gap CEO Richard Dickson made a compelling case on the state of the business on Yahoo Finance. A company that misses on sales and earnings estimates could see its stock price skyrocket as analysts and investors reason 'bad news' like this was 'priced into the stock' months ago. What was not priced in? The positive hype about future growth on the earnings call. Maddening. I have generally been on the side of the fence that says companies don't deserve passes for missed numbers or bad quarters that weren't properly guided. The numbers are the numbers. You assess them, crunch them, ponder them further, repeat this process 75 more times, and make a decision on the stock. It's not rocket science. To that end, I don't believe AI chip darling Nvidia (NVDA) fully deserves the free pass it got this week for a confusing quarter that was un-Nvidia-like. It reported adjusted earnings per share of $0.81, compared to estimates of $0.93, though the company posted a second (adjusted) EPS figure of $0.96 after excluding "H20 charge and related tax impact." In other words, the $0.96 figure represents what Nvidia would've made had its China business not gone poof courtesy of Trump's chip export control — a reality that does not exist. Nvidia has earned a legion of fans on Wall Street through years of strong execution and fundamentals. Analysts have been quick to 'exclude' the fall of its once lucrative China business. Every single research note after the results was chock-full of "let's blow more smoke for the Nvidia bulls." Price targets were hiked. All the Nvidia positives were bolded in the PDF docs. Sure, CEO Jensen Huang made a point to mention on the earnings call that demand for its AI chips remains strong. Profit margins will likely trend back to historically normal levels later this year, CFO Colette Kress said. But in my view, the earnings still fell far short of a consensus figure — and one that investors have little visibility into this round. The uncertainty of the China impact led analysts to estimate figures that included and didn't include the H20 loss. What made up the final consensus estimate? It's anybody's guess. And how do you ignore a giant chunk of Nvidia's sales in China simply vanishing? How do you completely wipe that out of your forecast model and think earnings power will still be the same? That loss will put pressure on all other areas of the operation to accelerate in the near term, medium term, and long term. I dig what Jensen said about the potential for robotics. I'm just not sure it's going to drastically drive Nvidia's business in the next eight quarters like the China business would have. Am I off the mark here? Should one only look at the many positives of Nvidia all the time? I am curious. Get at me on X @BrianSozzi. I always enjoy hearing new perspectives. I want to conclude by saying I don't hate Nvidia. It's more of a challenge to you to always question the "consensus" view on a stock. Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Sign in to access your portfolio
