By Adam Clark

Nvidia was eking out gains early on Tuesday as the market assesses the threat the chip maker faces in China from Huawei Technologies and looks ahead to earnings from major U.S. technology companies.

Nvidia shares were down 0.5% at $108.16 in premarket trading. The stock fell 2.1% on Monday.

Shares fell following news that Huawei is planning to test its Ascend 910D artificial-intelligence chip with domestic Chinese customers and is expected to get its first samples of the chips next month, as reported by The Wall Street Journal, citing people familiar with the matter.

"We see any emergence of a local system that pares the performance gap as a threat to sales of Nvidia to China. Longer-term, we see the USG [U.S. government] having the ability to step in and close loopholes that give Huawei access to leading-edge manufacturing technologies," wrote Piper Sandler analyst Harsh Kumar in a research note on Tuesday.

Kumar kept an Overweight rating on Nvidia stock, although he noted it faces some risk from delays to the ramp up of its Blackwell AI server infrastructure.

Four of the Magnificent Seven large-cap technology companies will report results this week: Meta Platforms and Microsoft on Wednesday, followed by Amazon.com and Apple on Thursday. The most closely watched metric will be capital expenditure, amid reports that some of the big tech players have pulled back on data-center spending.

Amazon and Microsoft have both said they aren't changing their AI spending plans.

"We've heard the rumors over [Microsoft's] canceled leases and continue to believe the concern is overblown. Entering/exiting contracts is normal course of business when you're laying out $80 billion -- not all contracts will come to fruition for one reason or another," said Jamie Meyers, senior analyst at Laffer Tengler Investments.

Google-parent Alphabet already reported earnings and held its outlook for capital expenditure this year at $75 billion.

Among other chip makers, Advanced Micro Devices was falling 0.4% and Broadcom was down 0.2% in premarket trading.

Write to Adam Clark at adam.clark@barrons.com

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April 29, 2025 07:40 ET (11:40 GMT)

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