Nvidia jumped to an all-time high on Monday as the artificial intelligence chip maker gave a presentation at CES and investors digested new reports about its business with China. Nvidia shares rose more than 4%, to more than $514 per share, putting the stock on track for a record close. Nvidia’s current all-time high was reached on November 20, when it reached $504.09 per share. Including Monday’s gains, the stock has advanced more than 27% since its recent low on Oct. 26. The S&P 500 rose about 14% during the same time frame. “I think the company is still undervalued,” Jim Cramer said Monday, referring to the fact that Nvidia was cheaper at the end of 2023 than it was 12 months ago even though the stock more than tripled last year on optimism. artificial intelligence. Nvidia is trading at nearly 24 times forward earnings on Monday, compared with its five-year average of 39, according to FactSet data. The Club last week trimmed Nvidia and a handful of other high-profile companies in 2023 to make some profits. But we maintain our long-term faith in the leading AI chip maker, which is up 239% in 2023. Information technology was the best-performing sector in the S&P 500 on Monday, rising 1.8%, helping the overall stock index rise 0.65. %. . The strength in technology came as the yield on the benchmark 10-year Treasury note fell below 4%, a closely watched psychological level. Nvidia is set to begin mass production of AI chips for Chinese customers that comply with the US government’s revised export rules on AI technology, Reuters reported on Monday, citing sources. The tougher restrictions, which took effect in October, temporarily limited Nvidia’s ability to sell coveted AI chips in the important market for the second time in as many years. After the US government implemented export controls on AI technology in October 2022, Nvidia redesigned its data center chips to meet performance limits, allowing the company to resume fulfilling orders for customers based in China. However, some Chinese tech giants, such as Alibaba, are less enthusiastic about Nvidia’s second attempt to make less powerful AI chips that comply with US rules, the Wall Street Journal reported on Sunday, citing people familiar with the matter. Alibaba, known for its e-commerce and cloud computing platforms, and WeChat owner Tencent have told Nvidia they intend to order fewer AI chips in 2024 than previous plans for the now-illegal processors, The Journal reported. Technology companies are redirecting some of their orders to Chinese companies, such as Huawei, as well as their own custom processors, the newspaper reported, with Jim downplaying the impact of the Journal’s report, suggesting that Nvidia’s less powerful data center chips remain superior to alternatives. “Give me a break. They will take anything from Nvidia,” he said, adding: “I think Chinese companies will have to understand that this is what’s best for them.” Sales to Chinese customers have historically represented between 20% and 25% of Nvidia’s data center revenue. In the near term, Nvidia said strong demand for its chips elsewhere in the world will offset the loss of Chinese sales. The company said that not being able to access the Chinese market in the long term will hurt the US technology market. While we’re encouraged by Nvidia’s seemingly strong relationship with the US government, we’re cautious about assuming that the company’s revenues in China will quickly return to historical levels. Meanwhile, Nvidia’s keynote presentation at CES began at 11 a.m. EST on Monday — a potential source of excitement for investors. The company announced new graphics processing units, or GPUs, for personal computers and professional workstations. The GPUs are designed to “unleash the full potential of generative AI on PCs,” Nvidia said in a press release. Nvidia said major laptop makers, including Dell and HP, will launch devices with the new graphics processing units. Nvidia CFO Colette Kress is also scheduled to attend a talk hosted by JPMorgan at 11 a.m. ET on Tuesday. (Jim Cramer’s Charitable Trust is long NVDA. See here for a full list of stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charitable fund’s portfolio. If Jim talks about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. The above Investment Club information is subject to our Terms and Conditions and Privacy Policy, as well as our Disclaimer. No obligation or fiduciary duty exists or is created by your receipt of any information provided in connection with the Investment Club. No specific results or profits are guaranteed.
Visitors visit the NVIDIA booth at the 2023 Hangzhou Apsara Conference in Hangzhou, Zhejiang Province, China, October 31, 2023. (Photo by Costfoto/NurPhoto via Getty Images)
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Nvidia The chipmaker jumped to an all-time high on Monday as the artificial intelligence chipmaker gave a presentation at CES and investors digested new reports about its business with China.