Nvidia to launch production of new AI chip for China

Nvidia (NVDA) shares moved higher Monday morning on reports the chip giant is planning to roll out mass production of its new AI chip designed for China in 2024. Yahoo Finance Reporter Madison Mills breaks down the details from the floor of the New York Stock Exchange.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video transcript

SEANA SMITH: Let's also take a look at NVIDIA. It is today's stock to watch. Now, the chip giant is reportedly looking to begin production of a new AI chips for China in the second quarter. This is according to reports from Reuters. Yahoo Finance's Madison Mill standing by with more on that for us. Maddie.

MADISON MILLS: Yeah, so exactly like you said, Seana. This is our stock to watch today because NVIDIA's market cap stands to have a broader impact on today's trade than some of those other noisy names we've been talking about like those airlines.

Now, why is this stock moving this morning? It's off of that news that NVIDIA is going to be delivering more powerful AI chips, one specific chip in Q2 of 2024 in China. And previously, this had come from NVIDIA. They were working on two other chips that would allow them to sell those chips in China in compliance with US regulatory measures.

However, this chip is a little bit more exciting to consumers in China. And that's because it's more powerful than those previous two chips. We heard from Alibaba, from Huawei previously that they were not excited about a less good chip from NVIDIA. This chip news today stands to change that.

So over the next couple of days, we'll want to see if we're getting any commentary, any reaction from Alibaba, from Huawei on how they feel about this new more powerful AI chip coming from NVIDIA in Q2 of 2024.

In terms of the market action, NVIDIA, the top performer so far today in the Magnificent Seven. Could this be something that traders cling to get a little bit of movement in the Mag Seven after last week's less-than-good performance on those Apple downgrades.

Again, NVIDIA, the best performer so far today in the trade in that Mag Seven. Could this name lift up that index as we head into the rest of the day? Or could Fed speak that we get later this afternoon throw a little bit of cold water on that market action?

BRAD SMITH: All right, certainly one of the larger questions as we had wrapped up 2023. And now beginning 2024, is there continued momentum in the Mag Seven trade here? Our own Maddie Mills here magnificent in her own way. Thanks so much, Maddie. Appreciate.