Latest news with #AIDiffusionRule
Yahoo
a day ago
- Business
- Yahoo
Palantir Stock vs. Nvidia Stock: Wall Street Says Buy One and Sell the Other
Forecasts from Wall Street suggest that median target prices imply downside in one stock and upside in the other. Nvidia is the market leader in data center GPUs and InfiniBand networking, which play crucial roles in supporting artificial intelligence applications. Palantir is a technology leader in decision intelligence software and artificial intelligence platforms. 10 stocks we like better than Palantir Technologies › Year to date, Nvidia (NASDAQ: NVDA) stock has returned 2%, while Palantir Technologies (NASDAQ: PLTR) stock has advanced 72%. But forecasts from Wall Street analysts suggest that investors should buy one and sell the other. Among the 71 analysts who follow Nvidia, the median target price is $175 per share. That implies about 30% upside from its current share price of $135. Among the 28 analysts who follow Palantir, the median target price is $100 per share. That implies about 23% downside from its current share price of $130. However, Wall Street has consistently underestimated Palantir, so investors shouldn't simply follow analysts' opinions. Here's a closer look at both companies. Nvidia reported encouraging financial results in the first quarter of fiscal 2026, which ended in April. Revenue increased 69% to $44 billion, and non-GAAP net income increased 33% to $0.81 per diluted share. Importantly, adjusted earnings would have increased 57% had it not been for a write-down related to semiconductor export restrictions. The investment thesis for Nvidia is simple: The company holds more than 80% market share in data center graphics processing units (GPUs), chips used to accelerate complex workloads like artificial intelligence (AI). Morgan Stanley analysts think the company can maintain 80%+ market share for the foreseeable future. Importantly, Nvidia also has a booming networking business. In fact, the chipmaker is the market leader in InfiniBand platforms, which are presently the preferred connectivity technology for back-end AI networks. And it recently added Alphabet's Google and Meta Platforms as customers. Put simply, Nvidia is the company best positioned to capitalize on demand for AI hardware. However, Nvidia is battling headwinds related to semiconductor export restrictions. The Trump administration recently revoked the AI Diffusion Rule, but it also banned the unlicensed sale of H20 GPUs to China, which effectively stops the company from participating in that market. Nvidia wrote down $4.5 billion in H20 inventory during the first quarter, and management says it will lose $8 billion in revenue in the second quarter. Nevertheless, Wall Street estimates that Nvidia's adjusted earnings will increase 44% in fiscal 2027, according to LSEG. That estimate makes the current valuation of 43 times earnings look cheap. I wholeheartedly agree with Wall Street's rating on Nvidia. Patient investors should feel comfortable buying a position at the current price. Palantir reported strong Q1 financial results. Customers climbed 39% to 769 and the average existing customer spent 124% more. Revenue soared 39% to $884 million, the seventh straight acceleration, and non-GAAP earnings increased 62% to $0.13 per diluted share. The investment thesis for Palantir centers on its unique software architecture, which not only lets customers pull nuanced insights from complex data, but also creates a feedback loop that yields insights that improve over time. The International Data Corp. (IDC) has recognized Palantir as the market leader in decision intelligence software. Palantir also says its software architecture is unique in its ability to operationalize artificial intelligence, meaning its platforms can help clients move AI applications from prototype to production more effectively than other solutions on the market. Forrester Research recently ranked Palantir as a technology leader in AI platforms, awarding it higher scores than peers like Google and Microsoft. However, not even the best business is worth buying at any price, and Palantir commands a very rich valuation. The stock currently trades at 285 times adjusted earnings. This looks particularly expensive because Wall Street estimates that the company's earnings will increase just 26% in the current year. Here's the bottom line: Palantir is an excellent company and I believe it will be worth more in the future, but I also think the risk-reward profile is heavily skewed toward risk at the current price. So, prospective investors should wait for a better buying opportunity, but current shareholders comfortable with volatility can sit tight. Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Palantir Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $651,049!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $828,224!* Now, it's worth noting Stock Advisor's total average return is 979% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Nvidia and Palantir Technologies. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, Microsoft, Nvidia, and Palantir Technologies. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Palantir Stock vs. Nvidia Stock: Wall Street Says Buy One and Sell the Other was originally published by The Motley Fool Sign in to access your portfolio
Economic Times
6 days ago
- Business
- Economic Times
TRUST but verify: India, US reboot AI chip talks
A high-level Indian delegation, including foreign secretary Vikram Misri and deputy NSA Pavan Kapoor, met their US counterparts in Washington this week. Among other issues, they discussed implementing TRUST (Transforming the Relationship Utilising Strategic Technology) initiative, and US-India COMPACT (Catalysing Opportunities for Military Partnership, Accelerated Commerce & Technology) partnership. At the centre of Misri's discussions with US deputy secretary of state Christopher Landau was how tech-trade-talent will shape the India-US May, the Trump administration had repealed the AI Diffusion Rule introduced towards the end of Joe Biden's tenure. The rule classified countries across three tiers, laying down specific criteria for exporting - or not - AI infrastructure to them. India, placed in tier 2, with about 120 other countries, faced a cap of 50,000 advanced GPUs to be imported from the US through 2027. Also, no US company could deploy over 7% of its overall compute power in India. That rule is slated to be replaced, with recent reports suggesting that new rules on exporting US AI infra could be driven by country-specific negotiations, and may feature in their ongoing bilateral trade negotiations. For India, there are no clear indications yet on what the new rules could mean for it. As of now, repeal of AI Diffusion Rule is widely seen as a 'big breather'. However, importing an uncapped number of GPUs, or other advanced AI chips, from the US may not necessarily translate to sufficient compute capacity for India. AI Diffusion Rule's repeal should be an opportunity to understand other roadblocks to building compute capacity for computing power is necessary to fuel any AI ambitions, GoI recently provisioned about 14,000 GPUs on subsidy for its AI ecosystem. It's expected to procure 15,000 more from 7 shortlisted bidders in the coming of volume, any GPUs or advanced AI chips imported need to be housed in data centres. This assumes significance as a May 2025 Deloitte report, 'Attracting AI Data Centre Infrastructure Investment in India', highlights that India may need 45-50 mn sq ft real estate, coupled with 40-45 terawatt hours (TWh) incremental power for data centres by 2030 for its AI demand. So, challenges to building data centres must remain in India's policymaking focus. The rule repeal remains positive news, though limited in its impact and contingent on other factors relating to India's overall compute capabilities. But it serves as an opportunity to clear the mist on capabilities of India's data centres that will ultimately house high-end AI chips from the US. Both governments must now double down on identifying roadblocks to bringing AI infra to India, particularly under the timely TRUST initiative. Further, the Quad leaders' summit, to be hosted by India later this year, can be opportune platform for presenting Washington's and New Delhi's findings on TRUST. This could lead to reformative policymaking relating to power, finance and regulatory capacity is only one of the building blocks for India's AI ambitions. Launched last year, the IndiaAI Mission, with a ₹10,300 cr-plus budget outlay, has made significant strides on its seven pillars. In addition to its massive and ongoing compute procurement, its AIKosh platform, unveiled in March, now boasts 350+ datasets and will only month, GoI selected the Bengaluru-based startup Sarvam AI to build India's first sovereign LLM model. It also awarded several projects for safety-enhancing technologies, and has called for partnerships for its AI Safety Institute. But more needs to be done, especially to address AI-induced structural unemployment, and the need to increase public-private spending on the R&D ecosystem. The writer is associate director,US-India Strategic Partnership Forum (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Anil Ambani is back. Is it for real? Can inclusive growth dividend transform economic security in India? He termed IndiGo a 'paan ki dukaan'. Still made INR30k crore by selling its shares Will revised economic capital framework lead to higher RBI dividend to govt? What pizzas are Indians eating? The clue lies with India's largest QSR. Stock Radar: KEC International stock reclaims 200-EMA; stock showing signs of bottoming out after 30% fall from highs Multibagger or IBC - Part 8: This Indian auto ancillary is expanding beyond 2Ws, with a foray into 4Ws Should you sell or hold Voltas, Blue Star and other 'summer stocks' because the monsoon is early? Answer is not in black & white Buy, sell or hold: UBS upgrades Aarti Industries to buy; Antique maintains buy on Shilpa Medicare
Yahoo
6 days ago
- Business
- Yahoo
Nvidia's CEO blasted Trump policy that will cost the company $10.5 billion in lost revenue—then praised Trump's ‘bold vision' minutes later
It's a tricky time to be a corporate chief executive, as tariffs, trade wars, and the red meat politics of the Trump presidency sow chaos across markets and supply chains. But no CEO may have it more difficult than Nvidia boss Jensen Huang, whose company announced a $4.5 billion hit to inventory on Wednesday as a result of a new U.S. policy on chip exports. As Huang spoke to analysts and investors on the company's earnings call, the CEO demonstrated an impressive feat of gymnastics, walking a fine line to critique the Trump policy that left a massive hole on his company's income statement while being careful not to provoke the president. Huang kicked off the call with sharp criticism of the Trump administration's new export controls which have forced Nvidia to stop selling its H20 chips in China. 'The U.S. has based its policy on the assumption that China cannot make AI chips. That assumption was always questionable, and now it's clearly wrong.' He added, 'Export controls should strengthen U.S. platforms, not drive half of the world's AI talent to rivals.' Nvidia said the new rule will cause it to forfeit $10.5 billion in revenue in the first half of this year. But while his words were pointed, Huang was careful not to call out President Trump by name in his critique, referring only to U.S. policy. When Trump's name did cross Huang's lips, it was to bestow praise on the POTUS. 'President Trump has outlined a bold vision to reshore advanced manufacturing, create jobs, and strengthen national security,' he said later during the call, noting that he was 'honored' to join him in U.S.-United Arab Emirates AI investment projects that include expanding to Nvidia chips. 'President Trump wants U.S. tech to lead.' Later in the call, Huang turned to another piece of government regulation: the so-called AI Diffusion Rule, passed in the last days of the Biden administration to restrict how advanced AI technology and equipment is shared with foreign countries. The Trump administration revoked the rule in January, and in this case, Huang deemed it worthy of crediting the president by name. 'It was really terrific to see that the AI Diffusion rule was rescinded,' Huang said. 'President Trump wants America to win. He also realizes that we're not the only country in the race.' The comments were all the more remarkable since they essentially praised Trump for doing exactly what Huang had moment earlier faulted Trump's administration for not doing. 'He wants the United States to win and recognizes that we have to get the American stack out to the world, and get the world to build on the American stack instead of alternatives,' Huang said. The paradox did not seem to bother investors, who cheered Nvidia's results and sent shares of the stock up roughly 5% in after hours trading on Wednesday. This story was originally featured on 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
Miami Herald
26-05-2025
- Business
- Miami Herald
Analysts issue rare warning on Nvidia stock before key earnings
AI chipmaker Nvidia (NVDA) is set to report first-quarter earnings on Wednesday, May 28. Nvidia is the leading supplier of graphics processing units, which are essential for artificial intelligence. Its stock surged 171% last year and nearly 239% in 2023, as investors bet on its dominant role in the AI boom. While Nvidia's growth remains strong compared to other tech giants, its pace is slowing. This Memorial Day, get $100 off TheStreet Pro - our best deal of the summer won't last long! Your portfolio will thank you The company expects to report about $43 billion in first-quarter revenue, a 65% increase from a year earlier. That is a sharp slowdown from the 262% growth in the same period last year. In February, Nvidia posted better-than-expected fourth-quarter results, but its stock dropped 8.5% after reporting a narrowed gross margin. The company attributed this to newer data-center products that were more complicated and costly. Nvidia stock continued to struggle in March and early April, dragged down by tariff uncertainties. However, the stock has rallied over the past month. Just ahead of its next earnings release, Nvidia is benefiting from the U.S. decision to scrap the Biden administration's AI diffusion rules, which would have restricted the sale of its chips to certain countries. Nvidia also became a key topic during President Donald Trump's trip to Saudi Arabia in May. The company said it will supply several hundred thousand AI processors to Humain, an AI startup backed by the Saudi sovereign wealth fund, over five years. Related: Nvidia CEO shares blunt message on China chip sales ban The AI Diffusion Rule, introduced in January 2025, was designed to restrict advanced AI chip exports to countries such as China. But it drew criticism from companies including Microsoft (MSFT) and Oracle (ORCL) , which argued the limits would hurt U.S. businesses in markets like India and Switzerland while doing little to block China. Although the rule has been scrapped, the U.S. is still tightening export controls to curb China's access to advanced AI chips. In April, Nvidia said it would take a $5.5 billion charge to export its H20 chips to China and other countries, citing higher costs under new export rules set by Trump. The company also said it now needs a government license to ship the chips. China remains a key market for Nvidia, making up 13% of its sales in the past financial year. To adapt to the new rules, Nvidia plans to launch another cheaper AI chip for the Chinese market, with production expected to begin as early as September, according to Reuters. Meanwhile, Chinese companies like Huawei are speeding up the development of homegrown AI technologies, reducing dependence on U.S. hardware. Nvidia's market share in China has dropped from 95% before 2022, when export restrictions began, to 50% now, CEO Jensen Huang said in Taipei last week. He also warned that more Chinese customers will turn to Huawei chips if U.S. export curbs continue. Investors will closely watch Nvidia's profitability, outlook, and any comments on chip production and exports in the upcoming earnings report. Bank of America has updated its views on Nvidia stock ahead of the earnings. It reiterated a buy rating with a price target of $160, according to a research report on May 23. The analysts said Nvidia faces near-term headwinds of the U.S. government's chip sales curb to China. However, the stock remains a "top pick" given its "unique leverage to the global AI deployment cycle, and possibility for China sales recovery on new redesigned/compliant products later in the year." Related: Analysts double price target of new AI stock backed by Nvidia Still, the firm flagged risks of a "messy Q2 guide." "NVDA could guide FQ2 to as low as $41bn, below recently lowered ~$46bn consensus," the analysts wrote, adding that this could imply an earnings per share of 85 cents, or 16% below consensus. More Nvidia: Will Nvidia get hit hard by AI capex risk?Analysts revise Nvidia price target on chip demandSurprising China news sends Nvidia stock tumbling Analysts also estimate Nvidia's full-year earnings per share outlook could land between $3.90 and $4.00, about 10% below the current consensus. Nvidia stock closed at $131.29 on May 23 and is down 2.23% year-to-date. By comparison, the S&P 500 index is down 1.34% over the same period. Related: Veteran fund manager unveils eye-popping S&P 500 forecast The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
IOL News
23-05-2025
- Business
- IOL News
How the US-China chip conflict is evolving under Trump
US President Donald Trump Image: Photo: AFP The United States has taken aim at China's Huawei over the cutting-edge chips powering artificial intelligence (AI), part of a shifting technology dispute between the two largest economies. AFP looks at how the US-China chip war is evolving under US President Donald Trump: Focus back on China A US government statement this month showed how the Trump administration is seeking to change the ways the US limits China's access to state-of-the-art semiconductors needed to develop AI. The US Commerce Department said on May 12 that it would rescind the "AI Diffusion Rule", which was issued by Trump's predecessor Joe Biden to shield American chips from Beijing. Set to take effect on May 15, the rule would have imposed three tiers of curbs, allowing trusted nations to freely import AI chips but controlling or banning their export to lower-tier countries like China. Video Player is loading. 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Next Stay Close ✕ It "would have stifled American innovation" while harming US diplomatic ties with "dozens of countries", the commerce department said. The same statement reminded companies that using Huawei Ascend -- the Chinese tech giant's most advanced chip -- "violates US export controls". It warned of "potential consequences" if US-built AI chips were used to train Chinese AI models. The announcement aimed to "refocus the firepower" of AI curbs squarely on Beijing, said Lizzi Lee, a fellow on the Chinese economy at the Asia Society Policy Institute. Manoj Harjani, a research fellow at Singapore's S. Rajaratnam School of International Studies, agreed, saying the policy turn meant "the spotlight (would be) clearly on China and Huawei". Different from Biden Analysts told AFP that Trump's approach to chip controls marks a distinct shift from Biden. The latter relied on multilateral coordination with allies to keep Beijing out of the loop, said Marina Zhang, an associate professor at the University of Technology Sydney's Australia-China Relations Institute. In contrast, Trump's recent measures "adopt a more selective and bilateral approach", Zhang told AFP. "(The policies are) flexible enough to accommodate allies' demands and protect US firms' global market positions, yet continue to aggressively target specific Chinese companies like Huawei through unilateral measures," she said. Harjani noted that Trump was often viewed as a leader who "does not care much for allies and partners". His chip policy, Harjani said, "runs counter to this assumption" as it includes efforts to create new AI-focused partnerships with allies. Beijing backlash Beijing has accused Washington of "bullying" and abusing export controls to "suppress and contain" China. The fighting talk shows that Beijing "will not yield easily", Zhang said. However, she said the restrictions would significantly hamper Huawei's access to "crucial" US chipmaking technology. "The AI competition has entered an accelerated and potentially dangerous phase, complicating future negotiations" on global AI governance, Zhang added. China has already made impressive strides in AI development, with homegrown startup DeepSeek shaking up the technology sector this year with a chatbot that seemingly matches the performance of US competitors at much lower cost. Chinese firms like Alibaba and Xiaomi have announced huge investments in AI in what experts say feeds into a national goal to cut reliance on foreign suppliers. "It's part of a broader mobilisation happening domestically," Lee said. "The strategy is not to beat the US -- it's to be good enough in the short term, while buying time to build domestic capacity and catch up to the cutting edge." Tech rivalry The AI rivalry is playing into broader trade tensions between Beijing and Washington. The two sides traded tit-for-tat tariff hikes after Trump took power, but this month dramatically slashed levies on each other's goods for 90 days, signalling a detente for now. Lee, from the Asia Society, said the trade truce was "never going to hold tech policy at bay", noting the US backlash against Huawei just days after crunch bilateral trade talks in Geneva, Switzerland. "Tariffs can be dialled up or down. Tech competition, by contrast, is hardening into the architecture of national security policy for both sides," she said. "If the US doubles down on blacklisting key Chinese AI players, it's hard to imagine Beijing making big concessions elsewhere." AFP
