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Nvidia's Strategic Manoeuvring

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  • Nvidia circumvents China ban with new line-up
  • US chipmaker share price reaches an all-time high

In a remarkable display of resilience and innovation, Nvidia has adeptly navigated the challenges posed by the US government’s restrictions on the sale of advanced semiconductors to China.

In October of last year, these regulations came into effect, significantly impacting Nvidia’s business strategy by negatively impacting its ability to sell its high-end chips in China.

The company’s engineers, in response, shifted focus towards the development of lower-powered chips.

This strategic pivot ensured compliance with the new US standards while maintaining their presence in the Chinese market.

Despite Nvidia’s efforts to adapt to the new rules set by the Biden Administration, industry giants like Alibaba and Tencent, which rank among Nvidia’s most prominent global clients, have scaled back their orders.

Additionally, the rise of domestic semiconductor manufacturers in China, such as Huawei, escalated the problems for Nvidia.

In the short term, geological conflicts between the US and the People’s Republic of China might not be a big issue for Nvidia, which can find other buyers for its AI Chips.

However, in the long run, this could be problematic for Nvidia, which relies on over 20% of its top line from China, and if we include Taiwan into the equation, the percentage jumps to 45%.

Adding to that worry was NVIDIA’s CFO, who said last year that this (restrictions) could have a significant impact (on Nvidia’s long-run sales).

On top of that, U.S. regulators have pledged to review the chip-export controls regularly and could further tighten export restrictions.

Navigating Geopolitical Tensions

The semiconductor industry is at the forefront of the US-China geopolitical tensions, with the US regularly reviewing chip-export controls.

This evolving regulatory landscape could impose further constraints on Nvidia’s operations, presenting a continual risk. China’s ambition to be a leader in AI technology only heightens these tensions, potentially affecting Nvidia’s long-term sales in the world’s second-largest economy.

Nvidia’s Resilience

Despite the geopolitical tensions, the company’s stock prices soared to an all-time high north of $531 a share, showcasing investors’ confidence in its ability to overcome regulatory hurdles.

Also, the company’s equity is up nearly 250% in the last year.

Nvidia’s ability to innovate, combined with its strategic moves to comply with international regulations, positions it well amidst uncertainties.

However, the long-term implications of geopolitical tensions and emerging domestic competition in key markets like China remain pivotal factors in shaping Nvidia’s journey.


Investors can long Nvidia using our 2x NVIDIA , 3x NVIDIA .

Alternatively, investors can short Nvidia using our -1x NVIDIA , -3x NVIDIA .

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

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Violeta Todorova

Senior Research

Violeta è entrata a far parte di Leverage Shares nel settembre 2022. È responsabile dello svolgimento di analisi tecniche e ricerche macroeconomiche ed azionarie, fornendo pregiate informazioni per aiutare a definire le strategie di investimento per i clienti.

Prima di cominciare con LS, Violeta ha lavorato presso diverse società di investimento di alto profilo in Australia, come Tollhurst e Morgans Financial, dove ha trascorso gli ultimi 12 anni della sua carriera.

Violeta è un tecnico di mercato certificato dall’Australian Technical Analysts Association e ha conseguito un diploma post-laurea in finanza applicata e investimenti presso Kaplan Professional (FINSIA), Australia, dove è stata docente per diversi anni.

Julian Manoilov

Marketing Lead

Julian è entrato a far parte di Leverage Shares nel 2018 come parte della prima espansione della società in Europa orientale. È responsabile della progettazione di strategie di marketing e della promozione della notorietà del marchio.

Oktay Kavrak

Head of Communications and Strategy

Oktay è entrato a far parte di Leverage Shares alla fine del 2019. È responsabile della crescita aziendale, mantenendo relazioni chiave e sviluppando attività di vendita nei mercati di lingua inglese.

È entrato in LS da UniCredit, dove è stato responsabile delle relazioni aziendali per le multinazionali. La sua precedente esperienza è in finanza aziendale e amministrazione di fondi in società come IBM Bulgaria e DeGiro / FundShare.

Oktay ha conseguito una laurea in Finanza e contabilità ed un certificato post-laurea in Imprenditoria presso il Babson College. Ha ottenuto anche la certificazione CFA.

Sandeep Rao

Research
Sandeep è entrato a far parte di Leverage Shares nel settembre 2020. È responsabile della ricerca sulle linee di prodotto esistenti e nuove, su asset class e strategie, con particolare riguardo all’analisi degli eventi attuali ed i loro sviluppi. Sandeep ha una lunga esperienza nei mercati finanziari. Iniziata in un hedge fund di Chicago come ingegnere finanziario, la sua carriera è proseguita in numerose società ed organizzazioni, nel corso di 8 anni – da Barclays (Capital’s Prime Services Division) al più recente Index Research Team di Nasdaq. Sandeep detiene un M.S. in Finanza ed un MBA all’Illinois Institute of Technology di Chicago.

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