Nvidia Stock Stays Stable After Huawei Sales May Be In Trouble

Nvidia Stock

Nvidia Stock (NASDAQ:NVDA)

Despite the publication of a report indicating that the graphics chipmaker maker’s intentions to sell technology to the Chinese technology giant Huawei may not go through, Nvidia (NASDAQ:NVDA) shares were able to gain roughly 1% on Monday. As a result, Nvidia stock surged. 

According to a draft report by a government contract in the United States, the Biden Administration is considering placing additional restrictions on Huawei regarding the types of technology that American companies can sell to Huawei. These restrictions would apply to the sale of technology.

The Trump government implemented its initial restrictions on Huawei in 2019. However, later that year, they devised a strategy to ensure that Huawei could still get some of its supplies.

Suppose the modification that is being suggested for 2023 is implemented as is. In that case, Nvidia (NASDAQ:NVDA) is expected to see a “strong economic effect,” as stated in the proposal initially reported by Reuters.

According to a senior State Department official who spoke with the media outlet, the paper in question was only a preliminary draft. The official “would not have approved the report in its present form.”

In addition, the news site said that the modification would have a “modest economic effect” on Qualcomm.

Both Nvidia and Qualcomm did not provide a response to our request for comment, and a spokeswoman for Qualcomm refused to comment.

Nvidia stock surprised Wall Street analysts by posting numbers for its fourth quarter that were better than anticipated late last month. As a consequence, the analysts praised the chip manufacturer.

Nvidia has also provided guidance for the first quarter, stating that it anticipates sales of $6.5 billion, with a plus or minus 2% margin of error. Still, market analysts anticipate the firm to post sales of $6.35 billion.

Nvidia (NASDAQ:NVDA) announced one week ago that the company has submitted paperwork for a $10 billion mixed-shelf offering.

Featured Image: Megapixl © Savconstantine 

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