Bernstein raises its price target on this stock with a 'history of momentum'
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Bloomberg
7 minutes ago
- Bloomberg
Bloomberg Daybreak: Trump to Name New Fed Governor
On today's podcast: 1) President Donald Trump said he will announce a new Federal Reserve governor and a new jobs data statistician in the coming days, two appointments that may shape his economic agenda amid anxiety over the trajectory of global growth. 2) Workers at Boeing Co.'s St. Louis-area defense factories are striking for the first time in almost three decades after union members rejected the company's modified contract offer. 3) US Trade Representative Jamieson Greer sounded a cautiously optimistic note on discussions with China on rare earth flows, following trade talks that further steadied ties between the economies.
CNBC
2 hours ago
- CNBC
Nvidia's set to regain some China access. But it still faces eroding AI chip market share
Nvidia's H20 chips are likely to return to China, but tech experts don't expect them to be met with the same fanfare in the market in light of new competition and regulatory scrutiny. The Trump administration last month gave Nvidia assurances that it would be permitted to resume sales of its H20 chips to China, after their exports had been effectively banned in April. It also announced a new "fully compliant" made-for-China chip. The move was seen as a huge win for the company, which had flagged billions in losses due to the policy. But while the H20s might be returning to the Chinese market that doesn't mean Nvidia will regain its former market share, analysts caution. In a recent report, global equity research and brokerage firm Bernstein forecast that Nvidia's AI chip market share in China would drop to 54% in 2025, from 66% the year prior. This drop is only partly owed to complications with resuming chip supply, as Chinese AI chipmakers have been seizing more of the booming domestic market. "U.S. export controls have created a unique opportunity for domestic AI processor vendors, as they are not competing with the most advanced global alternatives," Bernstein's report said, noting growing prominence of Chinese players such as Huawei, Cambricon and Hygon. "The localization ratio of China's AI chip market will surge from 17% in 2023 to 55% by 2027." Other analysts such as The Futurum Group CEO Daniel Newman were more bullish about Nvidia's bounce back in China. However, he also flagged potential market share erosion from Nvidia customers that might have found success with Chinese rivals while the H20 controls were in place. It's also worth noting that Bernstein's predictions assume that broader U.S. chip restrictions will remain largely unchanged. That creates a dynamic where Chinese companies continue to develop and offer advanced chips, possibly eroding demand for outdated U.S. offerings. Ahead of rolling back the H20 restrictions, Nvidia CEO Jensen Huang had been lobbying for more access to China, claiming export controls were inhibiting U.S. tech leadership. While Trump administration officials had said the rollback was part of trade negotiations, analysts have echoed Nvidia's basic argument that chip controls for the China market should be eased, thereby creating more dependency on U.S. tech offerings. "The assumption is that by keeping U.S. technology companies in the China game, the U.S. can preserve and even grow its geopolitical leverage," Reva Goujon, director at Rhodium Group, told CNBC. In a report last month, Rhodium Group said that this logic may see the administration shift to a "sliding scale" approach to export restrictions that could allow U.S. chipmakers greater access to China as Huawei and other Chinese chipmakers continue to upgrade. However, while Chinese AI developers will be happy to have increased access to Nvidia chips, Beijing isn't expected to slow its efforts to steer companies toward homegrown AI infrastructure, according to Goujon. She noted that the Cyberspace Administration of China's recent summons to Nvidia was an obvious signal of the state's intention to intervene in the local AI infrastructure market. According to the Cyberspace Administration of China, Nvidia met with Beijing officials on Thursday regarding national security concerns posed by the H20 chips, including potential backdoors that would allow parties in the U.S. to access or control them. Beijing's move appeared to come in response, at least partially, to new laws proposed in the U.S. that would require semiconductor companies such as Nvidia to include security mechanisms and location verification in their advanced AI chips. Nvidia later denied that its chips have any "backdoors" that would allow external access or control. The move by Beijing was also likely an attempt to create some hesitation among Chinese AI developers looking to buy the new H20s, according to Futurum's Newman. "China wants to leave some levers in place to potentially restrict outside AI chips at some point down the line if and when it feels its homegrown technology is truly competitive," Newman said. Beijing has previously restricted American chipmakers' business in China amid periods of intense technology and trade tensions between the two countries. Micron Technology, for instance, failed a cybersecurity review in 2023 and was subsequently blocked from critical IT infrastructure. "The continued complexity of China-U.S. trade relations could bring further complications [for Nvidia] as negotiations continue and as China attempts to cement its own AI strategy," Newman added.
Forbes
3 hours ago
- Forbes
Boeing Defense Workers Begin Striking For First Time Since 1996
Employees at Boeing's St. Louis defense factories rejected a contract offered by the aerospace giant Sunday afternoon and around 3,200 workers began striking starting at midnight—the first walk out the company has faced at its St. Louis defense hub since 1996. About 3,200 workers in Missouri and Illinois rejected an offer on Sunday. Getty Images The International Association of Machinists and Aerospace Workers, the union representing about 3,200 workers in St. Louis, St. Charles, Missouri, and Mascoutah, Illinois, voted against an offer from Boeing, which would have raised wages by 20%. Workers walked off the job at Boeing's defense factories at midnight, seven days after their previous contract expired. Union members previously 'overwhelmingly' rejected a contract offer on July 27, the IAM said, noting 'the proposal from Boeing Defense fell short of addressing the priorities and sacrifices of the skilled IAM Union workforce.' The workers in the three impacted factories assemble crucial missile systems and aircraft, including the F-15 and the F/A-18, according to their union. Boeing did not immediately return a request for comment from Forbes, but Boeing executive Dan Gillian told Bloomberg in a statement the company was 'prepared' for the strike and had a 'fully implemented contingency plan.' 'IAM District 837 members have spoken loud and clear, they deserve a contract that reflects their skill, dedication, and the critical role they play in our nation's defense,' local union lead Tom Boelling said in a statement. Brian Bryant, the union's international president, added that IAM 'will be there on the picket lines, ensuring Boeing hears the collective power of working people.' Key Background The last time workers at Boeing's St. Louis area facilities went on strike was in 1996, when over 6,000 workers at facilities then operated by McDonnell Douglas (the two aerospace companies would merge about one year later) walked off the job for 99 days. Boeing faced a much larger machinist strike last year when around 33,000 workers in Washington factories producing major commercial jets like the 737 and the 777 walked off the job in September. The strike lasted for 53 days, ending on Nov. 4 after workers agreed to a contract that secured a 38% raise over the next four years. The pending strike in the Midwest comes as Boeing faces regulator pressure over safety concerns, after the door plug of a 737 MAX 9 operated by Alaska Airlines blew off mid-flight in January 2024, leading to the Federal Aviation Administration briefly grounding the jets. The 737 MAX series of aircraft faced scrutiny for years after a series of deadly crashes, including the 2018 Lion Air Flight 610 that killed 189 people off the coast of Indonesia and the 2019 Ethiopian Airlines Flight 302 crash that killed 157 people. Former CEO Dave Calhoun announced in March 2024 he would step down by the end of the year. Kelly Ortberg succeeded him as CEO in August 2024 and immediately called for a 'fundamental culture change in the company.' Recently, the company's 2025 second quarter earnings call was cautiously optimistic. Boeing reported $22.7 billion in earnings for the quarter, its highest since 2019. The company also delivered 150 commercial airplanes in the second quarter, up from just 92 during the same period in 2024. These all helped to halve the company's losses to $612 million for the quarter—a notable improvement compared to the $1.2 billion lost last year at the same time. Boeing's stock is up more than 24% year to date, far outpacing major indexes, but its $221.90 share price at market close Friday was still almost half of the $446.01 per share the stock closed at on March 1, 2019.
