Nvidia Stock: The Week of April 14-18 in Review

Core Viewpoint - Nvidia's stock experienced significant volatility due to both positive developments in U.S. manufacturing and negative impacts from new export controls, leading to an overall decline in share price [1][4][7]. Group 1: Stock Performance - Nvidia shares dropped 8.5% last week, closing at 101.49 per share, while the S&P 500 and Nasdaq Composite indices also declined by 1.5% and 2.6%, respectively [1]. - On April 15, Nvidia stock gained 1.3% following news of plans to produce AI supercomputers in the U.S., despite the S&P 500 slipping by about 0.2% [4]. - On April 16, Nvidia stock fell 6.9% after announcing potential charges of up to 5.5 billion due to new export restrictions [7]. Group 2: Manufacturing Developments - Nvidia is collaborating with manufacturing partners to establish factories in the U.S. for AI supercomputer production, aiming to generate up to $500 billion in AI infrastructure over four years [4]. - The company has begun producing its new Blackwell chips at TSMC's facilities in Phoenix, Arizona, and is also partnering with Amkor and SPIL for packaging and testing operations [5]. - Nvidia is constructing two supercomputer manufacturing plants in Texas, with mass production expected to ramp up in the next 12-15 months [6]. Group 3: Export Controls and Financial Impact - Nvidia disclosed plans to take charges of up to$5.5 billion due to U.S. government restrictions on exporting its H20 chip to China and other countries [7][8]. - The new export controls are part of an ongoing series of restrictions that began in August 2022, affecting a significant portion of Nvidia's data center products, which account for 90.6% of total revenue [9][10]. - The H20 chip was specifically designed to comply with export controls but is now subject to a license requirement that effectively acts as a ban on exports to China [12]. Group 4: Financial Projections - Nvidia's fiscal Q1 revenue is projected to be around $38.5 billion after accounting for the$5.5 billion in charges, representing a year-over-year growth of approximately 48% [16]. - This projected revenue is slightly lower than the previous quarter's revenue of $39.33 billion, indicating potential challenges ahead [15]. - The impact of the charges is expected to significantly affect Nvidia's net income, particularly given the higher profitability of its data center platform [17]. Group 5: Long-term Outlook - Despite short-term challenges, Nvidia remains a strong long-term investment due to its leading position in the AI chip market and the massive total addressable market, even without China [19]. - The company is well-positioned to benefit from the growth of agentic AI and physical AI applications, which are in the early stages of development [19]. - Although Nvidia's stock is down 32% from its all-time high, it has still increased by 19.9% over the past year, outperforming the broader market [20].