Nvidia Corp. shares are trading near their lowest valuation of the artificial intelligence era, but a growing list of perils has investors cautious about taking advantage of the dip.
The latest shock for the chipmaker came after saying last week US authorities have barred it from selling the H20 chip line in China, a move that will cost it billions of dollars. The news added to concerns that spending on AI could be poised to slow, especially as the escalating trade war further clouds overall prospects for economic growth.
“The outlook isn’t as compelling as it was, and you really have to make a lot of assumptions here, about tariffs, China, hyperscalers, the macro,” said Krishna Chintalapalli, portfolio manager and tech sector head at Parnassus Investments. “Because all those things are compounding, the level of uncertainty is much higher than it has been.”
Shares of Nvidia have dropped more than 25% this year, roughly twice the decline of the Nasdaq 100 Index.
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