NVIDIA Stock PROBLEMS? US Regulators Coming For H20 AI Chip

Summary

This video dives into key developments in the semiconductor space, starting with Micron's upcoming earnings report and its potential impact on the sector. It discusses Nvidia's rumored regulatory issues over its H20 AI chips and their halted orders, possibly linked to U.S. restrictions. Intel's stock movement and buyout rumors are examined, along with potential investment from Apollo. The episode concludes by exploring the growing liquid cooling market, highlighting Nvidia's Grace Blackwell and key players like Vertiv and Delta Electronics in AI server components.

Takeaways

• 💡 Micron is set to report its fourth-quarter earnings on September 25th, 2024. This report will provide important insights into the memory market and overall semiconductor industry performance.
• ⚠️ Nvidia may face new U.S. regulatory restrictions on its H20 AI accelerator chip, which has been sold to China to bypass previous regulations. Nvidia has stopped taking orders, hinting at possible upcoming changes.
• 🔍 Another possible reason for Nvidia halting H20 sales could be a shift in production towards new-generation chips, as similar slowdowns have been seen in other product lines like the RTX 4090.
• 📈 Intel has experienced a 10% increase in stock value over the past five days, fueled by buyout and investment rumors. Despite challenges, Intel continues to attract attention from major investors.
• 🛑 Reports suggest that Apollo may increase its investment in Intel, possibly leading to more joint ventures in semiconductor manufacturing, such as the one in Ireland.
• 📉 Nvidia’s Grace Blackwell system may accelerate the transition to liquid cooling in data centers, as chips become hotter and more power-hungry. This could push the liquid cooling market's growth from 10% in 2024 to 20% in 2025.
• 🌡️ The growing liquid cooling market will focus on components like rear door heat exchangers and coolant distribution units. These parts could offer stronger profit potential compared to simpler hardware like quick disconnects and cold plates.
• 🏗️ Companies like Vertiv (VRT) and Delta Electronics are key players in the liquid cooling market. Vertiv’s market cap has risen over 110% this year, indicating strong performance in the space.
• 🧠 Nvidia remains a preferred investment option due to its strong moat and niche in AI server technologies, compared to hardware suppliers that have lower margins and higher competition.
• 🚀 The video emphasizes the importance of staying informed about semiconductor industry shifts, particularly with companies like Micron, Nvidia, Intel, and smaller suppliers in emerging markets like liquid cooling.

Q & A

What is the main focus of the video?

The video focuses on key news in the semiconductor industry, particularly regarding Nvidia, regulatory concerns, Intel investment rumors, and the growing liquid cooling market.

Why are Nvidia's H20 AI chips facing potential regulatory issues?

Nvidia's H20 AI chips are a scaled-down version of the H100, designed to bypass U.S. regulations and be sold in countries like China. However, rumors suggest that U.S. regulators are planning to ban the H20, potentially due to its technological similarities to restricted chips.

What event is happening on September 25th, 2024, that investors should pay attention to?

Micron is reporting its fourth-quarter earnings on September 25th, 2024. This event is significant as Micron's performance and insights may give investors a better understanding of the overall semiconductor market.

What are some alternative reasons for Nvidia halting sales of the H20 AI chips?

Aside from regulatory concerns, another possible reason for halting sales could be Nvidia's focus on reducing the production of its A102 chipset, which is used in both the RTX 4090 gaming GPUs and the H20 chips, in preparation for launching new generations of chips.

What is happening with Intel that investors should be aware of?

Intel has seen a stock price increase recently and there are rumors of potential buyouts and increased investments, including one involving Apollo, which already has a 49% equity interest in one of Intel's semiconductor manufacturing plants in Ireland.

Why is the liquid cooling market expected to grow in 2025?

The liquid cooling market is expected to grow due to the increasing power and heat demands of AI chips, which require more efficient cooling solutions. As a result, major cloud service providers are expected to shift from air cooling to liquid cooling.

What role does Nvidia’s Grace Blackwell 200 system play in the liquid cooling market?

Nvidia’s Grace Blackwell 200 system requires efficient cooling solutions due to its power demands, which is pushing cloud service providers to adopt liquid cooling, accelerating growth in this market.

Which components of liquid cooling systems are seen as having the most potential for growth?

According to the video, the rear door heat exchanger and the coolant distribution unit are components with higher potential due to their complexity compared to other parts like the quick disconnect, manifold, and cold plates.

What companies are mentioned as being involved in the liquid cooling market?

Two companies mentioned in the video as being involved in the liquid cooling market are Vertiv (ticker: VRT) and Delta Electronics. Vertiv is a U.S.-based company, while Delta Electronics is based in Taiwan.

Why is Micron's earnings report important for semiconductor investors?

Micron's earnings report is important because it may provide insights into trends in the memory market and the broader semiconductor industry, including potential indicators for companies like Nvidia.