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Jim Cramer Questions Nvidia's Trading Pattern Amid Positive TSMC Earnings And Biden's China Export Regulations

Wesley ParkThursday, Jan 16, 2025 11:12 pm ET

3min read

In a recent post on X (formerly Twitter), Jim Cramer, the popular investor and host of CNBC's Mad Money, questioned Nvidia's (NVDA) trading pattern, wondering when the stock would be allowed to rise higher. Cramer's commentary comes amidst positive earnings from Taiwan Semiconductor Manufacturing Company (TSMC) and concerns over Biden's China export regulations. Let's delve into the implications of these factors on Nvidia's stock performance.

Firstly, TSMC's strong earnings report has had a positive impact on Nvidia's stock. As a key supplier of advanced chips to Nvidia, TSMC's robust demand for its industry-leading 3nm and 5nm technologies indicates a strong demand for Nvidia's products. This is particularly relevant for Nvidia's high-performance GPUs and data center platforms, which rely on these advanced chips. The positive earnings from TSMC suggest that Nvidia's customers are likely to have strong demand for Nvidia's products, driving the stock's recent resurgence.

However, Biden's China export regulations could significantly impact Nvidia's business, particularly in the AI sector. According to D.A. Davidson analyst Gil Luria, up to 50% of Nvidia's chip market could be affected by the new restrictions. This is because many of Nvidia's AI customers, including hyperscalers and AI innovators, are based in China. The new regulations could limit Nvidia's ability to supply these customers with its advanced AI chips, potentially leading to a loss of market share and revenue. Additionally, the geopolitical tensions between the U.S. and China could further exacerbate the situation, making it more difficult for Nvidia to navigate the complex regulatory landscape.

In conclusion, while positive earnings from TSMC have driven Nvidia's stock performance, concerns over Biden's China export regulations pose a significant risk to the company's business, particularly in the AI sector. As Nvidia's trading pattern continues to be a topic of discussion, investors should closely monitor the situation and consider the potential impacts of these factors on the stock's future performance.

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