Nvidia in Crossfire: AI Dreams vs. Trade War Woes

Nvidia's shares dipped amid tensions in the Sino-U.S. trade war, impacting its AI chip sales forecasts for China. Despite strong revenues and a major share buyback plan, political hurdles challenge the company's growth ambitions. Meanwhile, the broader tech market eyes potential Federal Reserve rate cuts impacting U.S. stock futures.

Nvidia faces a challenging environment as its shares fell due to tensions in the ongoing Sino-U.S. trade war, which have impacted its ability to forecast AI chip sales to China. This came after Nvidia secured licenses to sell its H20 chips to China under a revenue-sharing agreement with the U.S. government.

Despite this setback, Nvidia announced strong quarterly forecasts and a massive $60 billion share buyback plan, which, along with positive remarks from CEO Jensen Huang, reassured investors concerned about AI infrastructure demand. Analysts note the political landscape hinders Nvidia's global ambitions rather than a lack of AI demand.

The tech-heavy Nasdaq saw mixed performances as other semiconductor firms like Super Micro Computer and AMD also faced declines. However, AI demand remained a catalyst for gains in companies like Snowflake. Broader market expectations include a possible Federal Reserve rate cut, depending on upcoming economic data releases.

(With inputs from agencies.)