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Investing.com -- Nvidia (NASDAQ:NVDA) shares were slightly lower in early U.S. trading on Tuesday, as investors awaited quarterly earnings from the world’s most valuable chipmaker and its updated outlook for demand in China.
Any comments from Nvidia on its Chinese business will likely be a major focus. Analysts are keen to parse out the ramifications of extended U.S. curbs on cutting-edge AI-related technology to China, which accounts for 25% of sales at Nvidia's crucial data center unit.
Recently, Chinese tech giants Alibaba Group (NYSE:BABA) and Tencent Holdings Ltd (HK:0700) have warned of potential disruptions from the bans. Tencent in particular said it had stockpiled Nvidia chips, but was now seeking new sources.
However, California-based Nvidia claimed in a regulatory filing in October that it does not expect the stricter controls will have "a near term meaningful impact on our financial results" due to "the strength of demand for our products worldwide." The stock, perhaps the most prominent beneficiary of a surge in enthusiasm over generative artificial intelligence this year, has so far managed to shrug off worries about the restrictions, touching a record high last week that gave it a valuation of $1.2 trillion.
Nvidia's latest returns will cover the three months until the end of October, meaning that the effect of the expanded bans -- which were only announced by the Biden administration last month -- may be limited. Forward guidance, as a result, is set to be squarely in the spotlight.
Shares of Nvidia's Asian suppliers posted gains on Tuesday ahead of the expected unveiling of the firm's third-quarter results following the close of trading on Wall Street.
Japan’s Advantest Corp. (TYO:6857), which supplies chip testing equipment to Nvidia, rose 2.9%, while Taiwan Semiconductor Manufacturing Corp. (TW:2330), or TSMC, added 1.4% in Taiwan trade.
Japanese chipmaking equipment maker Tokyo Electron Ltd. (TYO:8035) climbed by 1.1%, while South Korea’s SK Hynix (KS:000660) and Samsung Electronics (KS:005930) edged up 0.5% and 0.1%, respectively. Japanese tech conglomerate SoftBank Group Corp. (TYO:TYO:9984), which has exposure to Nvidia through its Arm Holdings (NASDAQ:ARM) unit, added 0.9%.
Over the past three quarters, Nvidia has beaten estimates, with the group receving a massive boost from a boom in demand for its AI-optimized chips.
Ambar Warrick contributed to this report.
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