Nvidia shares rise on Wednesday: What’s going on? – NVIDIA (NASDAQ:NVDA)

NVIDIA Corporation NVDA Shares are trading higher on Wednesday, rebounding from Tuesday’s sharp decline, as chip stocks across the board recover from heavy selling pressure. Here’s a look at what’s driving the movement.

What you should know: Nvidia shares fell more than 4% on Tuesday, along with several chipmakers, on several developments.

Nvidia is at the center of U.S. policy discussions over AI chip exports, which may explain some of the recent volatility. Bloomberg reported on Tuesday that the Biden administration is considering new export restrictions aimed at curbing sales of advanced AI chips to countries considered potential national security threats.

While China is already subject to these restrictions, there is talk of expanding controls to other countries, including those in the Persian Gulf, where AI infrastructure development is accelerating.

The sell-off in the broader chip sector on Tuesday was also partly due to weak forecasts ASML Holding Inc. ASML. The company lowered its full-year revenue forecast due to weaker demand for non-AI chips. ASML shares plunged 16%, dragging down other chipmakers.

Nvidia and other semiconductor stocks are rebounding on Wednesday. The uptick appears to be driven in part by optimism about AI-related demand, according to the ASML CEO Christopher Fouquet In a conference call, he said the company remains “fairly optimistic” about long-term growth in the AI ​​segment. Fouquet also noted that the lower demand for chips comes mainly from the automotive and consumer electronics industries.

“We are still quite optimistic about AI,” Fouquet said Wednesday morning.

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NVDA price action: According to Benzinga Pro, Nvidia shares were up 3.56% at $136.30 at the time of writing.

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