AI has driven 187% stock gain for Nvidia in 2023, 70% rise in AMD shares
Shares of Nvidia Corp. and Advanced Micro Devices Inc. slumped in the extended session Tuesday following a report that the Biden administration is considering a new ban on sales of AI chips to China.
Nvidia shares NVDA, +3.06% A fell 3% after hours, following a 3.1% gain to close at $418.76, while AMD shares AMD, +2.68% also fell 3%, after a 2.7% gain in the regular session to close at $110.39.
Late Tuesday, the Wall Street Journal reported the Commerce Department could further block sales of AI chips to China unless U.S. companies first obtain a special license.
The ban would follow upon similar actions last year that threatened $400 million in Nvidia sales, but the company found a workaround in supplying a version of products that avoided the ban.
Both Nvidia and AMD have launched new AI chips this year: Nvidia in March and AMD earlier in the month. Last year’s release of Open AI’s ChatGPT generative AI — with billions of dollars invested by Microsoft Corp. MSFT, +1.82% — resulted in an explosion of interest in artificial-intelligence technology, prompting luminaries to herald the technology as the biggest thing in tech since … you name it.
News of the possible ban happened to follow a claim earlier in the day from Baidu Inc. BIDU, +3.09% on the Chinese search company’s blog, which said its Ernie 3.5 version AI outperformed ChatGPT’s earlier version “in comprehensive ability scores,” and its latest iteration, GPT-4, which was released in mid-March, “in several Chinese-language capabilities.”
Baidu’s claim appeared to be based upon performance metrics published in China Science Daily. On Wall Street, ADRs of Baidu were down 0.7% after hours, following a 3.1% gain to close at $143.90.
As of Tuesday’s close, Nvidia shares were up 187% in 2023, and AMD shares were up 70% for the year.
Shares of Super Micro Computer Inc. SMCI, +4.47%, which have benefited from AI, also declined 3% after hours, while shares of Intel Corp. INTC, +2.28%, which supplies chips to data centers, saw shares decline 1% after hours.