Squawk on the Street
Cramer's Morning Take: Nvidia Probe 12/9/24
Dec 9, 2024
Nvidia faces scrutiny from Chinese regulators over potential anti-monopoly violations linked to its $7 billion Mellanox acquisition. The implications of this probe on the data center industry and Nvidia's strategic direction are critically examined. Additionally, the discussion shifts to market dynamics, showcasing Nvidia's stock performance against competitors like AMD and the rise of custom chips. There's a blend of optimism about Nvidia's resilience, despite challenges in production and investment strategies.
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Quick takeaways
- Nvidia is under investigation in China for potential anti-monopoly violations, but confidence in its strength remains despite regulatory scrutiny.
- AMD is facing competitive challenges in the AI chip market but is simultaneously gaining market share against Intel in key sectors.
Deep dives
NVIDIA's Competitive Landscape
NVIDIA faces scrutiny from China regarding its acquisition of Mellanox, with a probe opened into potential anti-monopoly violations. Despite this, there is confidence that NVIDIA remains strong, as the Chinese regulatory actions lack substantial leverage. However, the stock's recent pressures stem from a wave of negative media coverage that can influence market perception and investor sentiment. The uncertainty surrounding their chip production yield, specifically the success rates of initial runs, contributes to concerns about the company's short-term performance and stock value.
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