Stock Story -
What Happened: Shares of leading designer of graphics chips Nvidia (NASDAQ:NVDA) jumped 11.6% in the morning session after semiconductor stocks soared after Reuters reported that the Biden administration plans to introduce softer trading restrictions related to US companies' export of semiconductors. According to sources, "shipments from allies that export key chipmaking equipment—including Japan, the Netherlands, and South Korea—will be excluded, limiting the impact of the rule."
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What is the market telling us: Nvidia's shares are very volatile and over the last year have had 17 moves greater than 5%. But moves this big are very rare even for Nvidia and that is indicating to us that this news had a significant impact on the market's perception of the business.
The previous big move we wrote about was about 24 hours ago, when the company dropped 8% as the major indices fell with the Nasdaq down 1.2% while the S&P fell 0.6%. Investors are likely taking profits in megacap tech companies ahead of a big earnings week. Some of the big tech companies reporting earnings in the week include Meta (NASDAQ:META), Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN).
Nvidia is up 139% since the beginning of the year, but at $115.33 per share it is still trading 14.9% below its 52-week high of $135.58 from June 2024. Investors who bought $1,000 worth of Nvidia's shares 5 years ago would now be looking at an investment worth $27,314.
