Adam Clark
Nvidia stock was edging up early on Wednesday. Earnings from Advanced Micro Devices and Super Micro Computer indicated healthy demand for artificial-intelligence chips, but also highlighted risks from export restrictions and the transition to new infrastructure.
Nvidia shares were up 0.1% at $113.68 in premarket trading. The stock fell 0.3% in Tuesday's session.
Positive signs came from rival chip maker Advanced Micro Devices, which reported better-than-expected earnings, and gave sales guidance ahead of expectation in a report on Tuesday.
However, AMD warned that U.S. export controls on semiconductors would cost the company $1.5 billion in revenue this year, in a reminder of the threat hanging over the chip industry.
Nvidia has already disclosed that its first-quarter results will include a $5.5 billion charge associated with inventory and purchase commitments related to the H20 chip for the Chinese market, following the imposition of licensing requirements. Analysts at Jefferies have suggested that will translate to around a $10 billion hit to revenue.
Nvidia CEO Jensen Huang estimated the market in China for AI chips will be $50 billion in a few years, and warned that restriction on semiconductors exports wouldn't limit Chinese military capacity, in comments late on Tuesday to attendees of the Milken Institute annual meeting.
Elsewhere, AI-server maker Super Micro reported earnings and revenue at the top end of its guided range on Tuesday, but provided disappointing guidance for the current quarter, noting some customers were delaying decisions. Super Micro sells servers that house Nvidia chips, and it said the issue partly related to the transition between Nvidia's older Hopper hardware and its new Blackwell processors.
"We remain very confident with our midterm and long-term growth. So, especially [the] Blackwell product line, we have very strong demand," Super Micro CEO Charles Liang told analysts on an earnings call.
Super Micro shares were down 6% in premarket trading. Among other chip makers, AMD stock was up 1.3%, and Broadcom stock was rising 0.8%.
Write to Adam Clark at adam.clark@barrons.com
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May 07, 2025 08:59 ET (12:59 GMT)
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