Even though leaders in the AI chip industry have raised concerns about the emergence of Chinese competitors, tech stocks experienced an upswing on Thursday, buoyed by robust results from Nvidia.
The Stoxx Europe Tech Index increased by 0.8% on Thursday, leading to a 2.4% rise in Dutch semiconductor equipment manufacturer ASML. Meanwhile, in the US, tech-focused NASDAQ futures surged by 2%, alongside a 6% pre-market gain for Nvidia’s shares.
The uptick in tech and artificial intelligence stocks followed Nvidia’s report that surpassed Wall Street expectations, with quarterly revenues jumping 69% to $44 billion (£32.6 billion). The company also expressed optimism that business transactions in the Middle East could offset losses from China.
In April, former US President Donald Trump announced restrictions on AI chip exports to China, effectively cutting off a significant revenue stream, although Nvidia continues to sell H20 AI chips to Chinese firms.
Nvidia’s CEO Jensen Huang cautioned that Chinese competitors are capitalizing on the vacuum left by US trade barriers. “Chinese rivals have adapted,” Huang stated to Bloomberg TV. He noted that Huawei, which has been blacklisted by the US government, is “extremely formidable.” “Like everyone, their capabilities are multiplying each year,” Huang remarked. “The volume has also significantly increased.”
While US government policies aim to shield AI technology from Chinese influences, Huang indicated that domestic businesses are simply exploring alternative options. “The importance of the Chinese market should not be underestimated,” Huang noted. “It’s home to the largest population of AI researchers globally.”
Nvidia mentioned that it anticipates losing out on $8 billion in revenue for the second quarter due to Trump’s trade restrictions.
Tech investors felt positive after a recent judicial ruling that might challenge the president’s aggressive trade regime, as the US trade court opposed Trump’s severe tariff policies. Nonetheless, uncertainty looms since the White House has already appealed this decision from the International Trade Court based in New York.
In other news, shares of Tesla, another key player in AI technology, climbed by 2.6% after CEO Elon Musk confirmed his decision to step down from his role in the Trump administration.
Musk has been “at the helm of the Department of Government Efficiency (DOGE) since January, ruthlessly cutting expenditures across various public sectors and institutions. He announced in April his intention to resign following a decline in Tesla’s revenue and his failure to secure a Supreme Court position, which had consumed millions in support of Republican candidates.
Source: www.theguardian.com
