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Luke Kawa

Nvidia tumbles as China pushes toward an AI boom without the US juggernaut

What does an AI boom look like without Nvidia at its epicenter?

More and more, it seems that China is willing to test out those uncharted waters.

Shares of the $4 trillion chip designer are down more than 3% in early trading after The Wall Street Journal reported that Alibaba is developing a chip for AI inference tasks manufactured domestically, the latest in a series of signs that the country is looking to wean itself off of any dependence on Nvidia and US technology to develop its AI capabilities.

The Chinese AI market is of no small import to Nvidia. On the conference call following earnings this week, CEO Jensen Huang called it a $50 billion opportunity that he expects to grow at 50% per year.

But China has reportedly told its leading tech companies to forgo purchases of Nvidia’s H20 chips, citing data security concerns. These allegations regarding data security have been denied by Nvidia, and appear to reflect China’s desire to avoid having its AI development be beholden to the whims of US policymakers.

Nvidia had been effectively locked out of China’s AI market since mid-April, when export curbs were enacted, and didn’t receive licenses to ship H20 processors to the world’s second-largest economy until August. The chip designer reportedly halted production of these chips recently, which suggests that China’s directive to its tech giants has some teeth.

Without access to the most advanced technology, China will have to effectively make up for what it lacks in ability with volume.

This news also comes as other, smaller Chinese chipmakers begin to capture more attention from domestic investors. Cambricon, for instance, soared 15% to a record high earlier this week after reporting surging sales growth. Its share price more than doubled in a span of less than three weeks. Per the Financial Times, Chinese officials have told their biggest domestic chipmaker, SMIC, to devote some more capacity to Cambricon rather than give all the availability to Huawei Technologies, which is currently the country’s most advanced AI chip developer.

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Matt Phillips

Morgan Stanley upgrades Tempus AI to overweight

Morgan Stanley analysts gave Tempus AI an “overweight” rating — essentially a “buy” — and a raised their price target to $85, from $80, writing in a note published late Monday that despite being “a relatively new player, the company has already established itself as one of the top providers of precision oncology testing.”

As part of their reasoning, analysts spotlighted faster-than-expected growth in Tempus’ hereditary cancer risk testing business, which it acquired through the purchase of Ambry Genetics in a deal that closed earlier this year.

Morgan Stanley also suggested there could be upside in Tempus’ relatively small data and services unit, whic it sells de-identified patient data pulled from its testing archive for use in pharmaceutical drug trials and other applications.

Despite being consistently unprofitable since its 2024 IPO, Tempus has been winning over Wall Street analysts.

Of the 17 covering the stock, ten have buy ratings — or their equivalent — on Tempus, up from six in June.

Tempus has seen its share price more than double this year.

Wall Street 2026 outlook and S&P 500 forecasts (binoculars)

Wall Street has great expectations for the next year in the stock market

Stock watchers are pretty bullish about the coming year — as they typically are — with eyes on the Fed and whether the AI boom will still have legs. BofA is a little skeptical.

Matt Phillips3h
markets
Luke Kawa

Nvidia pares gains after Amazon launches newest AI chip

The problem with being the king is that everyone’s trying to get their hands on your shiny crown.

Shares of Nvidia pared gains after Amazon publicly launched its custom chip, called the Trainium3, as part of its AWS re:Invent 2025 event in Las Vegas.

The company said these chips can cut costs associated with training and using AI models by up to 50% compared to GPU-based systems offered by the likes of Nvidia and Advanced Micro Devices.

The potential for increased competition, particularly from Google, which is reportedly in talks to sell its custom TPUs codesigned with Broadcom to Meta, has been a drag on Nvidia shares as of late, as this has the potential to weigh on its market share and profitability.

Nvidia came into the week trading at a record discount to Broadcom, the custom chip specialist, based on 12-month price-to-earnings ratios.

Even as traders fret over competition, however, it’s clear that leading tech companies are building for a future in which Nvidia is still the dominant player. For instance, Amazon said that the next edition of this custom chip (Trainium4) “will support Nvidia NVLink Fusion high-speed chip interconnect technology.”

In other words, Amazon is preparing for a world in which its upcoming chips will be used in tandem with Nvidia’s offerings.

markets
Luke Kawa

Intel soars to 52-week high on most bullish options activity since report of US government stake

Intel is powering its way to a fresh 52-week high on a boatload of bullish options demand and little fundamental news.

Nearly 250,000 calls have changed hands an hour into the trading day, which is roughly equivalent to the 20-day average for a full session.

As of 10:30 a.m. ET, the stock’s daily put/call ratio is under 0.25, the lowest since August 14. That’s the day the stock surged on a report that the US government was considering taking an equity position in the struggling chipmaker, which it eventually went on to do.

It also probably doesn’t hurt, in terms of showing continued support for the tech ecosystem, that the Trump administration announced a $150 million investment in xLight, an upstart aiming to compete with ASML in the production of extreme ultraviolet lithography machines, which are needed to make advanced chips.

xLight, as it so happens, has former Intel CEO Pat Gelsinger as its executive chairman.

markets
Luke Kawa

AI energy plays surge amid one-way bullish options traffic

The smaller, more speculative AI-linked energy plays are back in full boom mode on Tuesday, driven by a speculative bid in the options market.

  • Zero-revenues nuclear firm Oklo is up nearly 9% as of 10:10 a.m. ET. Its put/call ratio is below 0.3, compared to a 20-day average of 1.05.

  • Fuel cell company Bloom Energy is likewise seeing mainly one-way traffic, with a put/call ratio of 0.3 versus a 20-day average of 0.7.

  • The options action is even more lopsided in hydrogen fuel cell company and on-again, off-again meme stock Plug Power. Its put/call ratio is a paltry 0.05 compared to a 20-day average of 0.2.

For Plug and Oklo, the most actively traded contracts are calls that expire this Friday. For Bloom, it’s a call that expires on December 19.

These companies had all cratered amid a broad retrenchment in speculative stocks since mid-October as credit risk began to seep into the AI trade.

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