On April 19, Nvidia fell 10%, its worst performance since March 2020. As for Nvidia, there has been no unfavorable news.
As early as April 11, TSMC Terence Liao said that the waiting time for Nvidia H100 delivery in the past few months has dropped from the initial 3-4 months to the current 2-3 months. Server OEMs also revealed that the supply bottleneck of H100 is gradually easing.
Nvidia supplier stock price plummeted //
Super Micro Computer, one of Nvidia's server suppliers, fell 23% on the same day. Previously, the company broke with the pattern of providing recent earnings forecasts and announced that it would report earnings on April 30.
In January, Super Micro raised its sales and earnings guidance 11 days before it released its second-quarter financial results. The company became a component of the S&P 500 index in March.
Since March 2020, the stock prices of Nvidia and Super Micro have risen sharply. Although Super Micro has retraced more than 38% from its highs, its stock price has still risen more than 26 times since the beginning of March 2020!
Super Micro's share price is still up about 246% this year after rising 151% in 2023. On August 9, 2023, Super Micro plunged 23.4%.
However, despite the tremendous growth that Super Micro has seen from its relationship with Nvidia, the market is still highly competitive, with competitors including Dell and HP. However, HP shares did not fall on April 19 and rose 0.69%.
According to some analysts, some investors choose to stay away from chip stocks with huge gains before the earnings report, cash out, and wait for further verification of the financial report.
According to the data, on April 19, the chip-focused VanEck semiconductor index fell 4.5%, and Arm shares fell 17%. Arm is often seen as a complement to Nvidia's graphics processor-based AI servers. Shares of AMD, Nvidia's main GPU rival, fell 5%. Facing interest rate headwinds // The S&P 500 and Nasdaq have fallen for six consecutive trading days in recent times.
The US CPI reached 3.5% in March, and the Fed became more cautious. According to the Federal Reserve's Financial Stability Report, persistent inflation is seen as the most important financial stability risk.
Fed Chair Jerome Powell and New York Fed Chair have both recently expressed their views on not cutting interest rates in the near term. Market expectations for the Fed to cut interest rates this year have fallen again and again.
Traders on April 21 expected the probability of a 25bp rate cut in September to fall to 45.1%, well below the level of a week ago, according to the Fed Watch tool.
It is already a fact that interest rates have remained at higher levels for longer. In the chip industry, which is highly sensitive to interest rates, it is almost inevitable that the stock price will fluctuate sharply in this context.
Because Nvidia, which is hot in artificial intelligence, needs to prove that its earnings growth can match the current valuation with its earnings report again. Wind data shows that Nvidia has a PE of 64 times and an EPS of $11.9, with a current market capitalization of just over $1.9 trillion. Not yet downgraded //Wind data shows that since March, 48 institutions have given Nvidia a buy investment rating, 48 institutions have given an overweight investment rating, and 4 institutions have given a neutral investment rating. None of the institutions gave a sell or underweight rating.
Morgan Stein raised its price target on Nvidia from $795 to $1,000 on April 10 and gave it an overweight rating. Guotai Junan raised its price target on Nvidia from $892 to $1,116 on March 22.
In 2021, cryptocurrencies rose and demand for Nvidia's GPUs increased, and its stock price soared by more than 100%. Nvidia's share price fell by more than 46% in 2022 as cryptocurrencies then plummeted. In contrast, advances in AI are likely to have a greater transformative power and have a more sustained impact on Nvidia.
However, great market opportunities also mean great competitive pressure.
For example, Intel also announced the Gaudi 3 production node at Vision 2024, which will be the first to launch air-cooled samples in the first quarter of 2024, liquid-cooled samples in the second quarter, and batch delivery of air-cooled and liquid-cooled versions in the third and fourth quarters of this year, respectively. The Gaudi 3 will be supplied by four OEMs: Dell, Hui•Packard Enterprise, Lenovo and Supermicro.
Intel is preparing to launch two Gaudi 3 AI accelerator chips for the Chinese market, named HL-328 and HL-388, with OAM and PCIe specifications respectively, with the former coming in June and the latter in September, as well as Gaudi 3 in PCIe specifications.
Overall, this week has been a huge test for U.S. tech stocks. On the one hand, technology stocks will successively announce their latest quarterly earnings reports, and the growth of technology stocks such as chips will be examined in an all-round way. On the other hand, important data such as the S&P Global Manufacturing PMI for April, the US GDP for the first quarter, the core PCE price index, and the one-year inflation rate expectation for the US in April will be released intensively, and the interest rate outlook will once again be carefully assessed.
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