Nvidia shares drop on stricter AI chip export rules, but analysts see it as a buying opportunity.

From Nasdaq: 2025-01-15 18:00:00

Nvidia shares drop after Biden administration enforces stricter AI chip export rules, limiting GPU sales to most countries. 18 countries face no restrictions, while 24 are banned outright, requiring licenses for GPU purchases exceeding 1,700. Nvidia criticizes rule, citing negative impact on U.S. global competitiveness and innovation.

Impact on Nvidia includes potential hindrance in AI data center development for nations facing GPU restrictions. However, large language models are already training on more GPUs than the limits allow, with future plans for GPU clusters of 1 million chips. 45% of Nvidia’s revenue comes from the U.S., 13% from China, and 17% from Taiwan.

Despite export curbs, Nvidia’s growth potential from big hyperscaler customers remains strong. Collaboration with cloud computing companies could bypass restrictions for AI data centers in impacted countries. Valuation shows undervalued stock with P/E ratio below 30 and PEG ratio below 1, making it a solid buy for investors.

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Read more at Nasdaq: Nvidia Shares Fall on New AI Chip Export Rules. Is This a Golden Opportunity to Buy the Stock?