Markets
markets
Luke Kawa

White-hot Chinese demand is spurring Nvidia to order even more H20s: Report

Chinese demand for Nvidia processors is so strong that the chip designer is tearing up its two-week-old plans in order to sell even more AI GPUs to the world’s second-largest economy. That’s the skinny of a report from Reuters saying that the company has ordered an additional 300,000 H20 chips from TSMC, changing plans to merely sell its existing inventory. Shares are up 1.5% as of 7:25 a.m. ET.

It’s a stark turnabout for the chip designer, which took a $4.5 billion charge in its first-quarter earnings related to excess inventory and purchase obligations for the H20 chip it was unable to sell into China due to export restrictions put in place in mid-April. Nvidia also said that the ban on H20 exports would leave an $8 billion revenue hole in its second-quarter results.

Those export curbs were said to be scrapped in mid-July as part of an ongoing diffusion of US-China trade tensions, with the Trump administration aiming to secure US companies’ access to rare earth minerals from China. However, per Reuters, Nvidia has not yet received licenses to ship its H20s to China.

Nvidia’s alarm over its inability to ship H20 chips to China had become a front-burner issue for the chip designer, with the country mentioned a whopping 27 times on its most recent earnings call as CEO Jensen Huang warned that the “$50 billion China market is effectively closed to US industry.”

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Tasha Matsumoto, Luke Kawa
3h
Stocks lose steam after trade tensions reignite

Tech dragged down the S&P 500 and the Nasdaq 100, but the Russell 2000 posted a new record-high close.

Toronto Zoo born giant panda cub in its enclosure for the first time in the day.
markets
J. Edward Moreno

Grindr confirms it’s in talks to go private for no less than $15 a share

Grindr said its largest shareholders have “engaged financial and legal advisers” to explore the possibility of taking the company private, according to a Tuesday regulatory filing.

The filing confirms a Monday report from Semafor and adds a tiny bit of clarity: the price for a take-private deal hasn’t yet been determined, the filing said, but it would be no less than $15 a share. Shares of the company, which had surged after the Monday report, pulled back some in Tuesday afternoon trading, to around $12.50.

James Lu and Raymond Zage, the shareholders who together own more than 60% of the gay dating app, have received a preliminary and conditional debt financing proposal of as much as $1 billion, per the filing.

While Grindr has generally performed better than its peers, it is still down about 30% for the year.

The move is being discussed, Semafor reported, as Zage and Lu had pledged nearly all of their Grindr stock for personal loans. Their lender seized some shares and sold them last week after the loans became undercollateralized following the stock’s recent slide.

Max Knoblauch

US airlines take off as oil prices sink amid trade tensions between the US and China

Oil prices are falling on Tuesday as trade tensions between the US and China ripple across markets, with the International Energy Agency warning of a large supply glut that could last into next year. Crude oil contracts were trading at a five-month low on Tuesday.

But what’s bad for crude is good for airlines, which stand to benefit from lower fuel costs. Shares of US carriers including JetBlue, Delta Air Lines, United Airlines, and Southwest Airlines were all up at least 4% on Tuesday afternoon.

markets
Max Knoblauch

Roblox rallies on a Jefferies price target hike and positive sentiments from Morgan Stanley

Gaming platform Roblox is in the green on Tuesday, following a price target hike from Jefferies to $130 from $126. That target is about 5% below where Roblox is currently trading.

Meanwhile, Morgan Stanley maintained its higher $170 target on the company — one of gaming’s biggest “black holes.” Morgan Stanley called Roblox a clear leader in next-gen entertainment, with parallels to YouTube given its strong position in user-generated content.

In recent months, Roblox has seen booming player counts through updates and events in its most popular titles, including “Grow a Garden” and “Steal a Brainrot.” According to third-party tracking firm RoMonitor, “Steal a Brainrot” had more than 25 million concurrent players on Saturday, when a Halloween update was added to the game.

markets
Matt Phillips

Data center stocks knocked back amid China stress

The buy-everything-data-center-related trade is having a rough ride Tuesday, with Goldman Sachs’ themed basket of AI data center stocks dropping 1.5% in early trading after soaring more than 3.5% to start the week.

That’s partially because some suppliers of bits and bobs needed to fit out the hangar-like concrete structures selling computing power for AI are still exposed to risks of the China-US trade war, which seems to be flaring anew.

For instance, while most of the switches and routers Arista Networks sells are made in Malaysia, Vietnam, and Mexico, it also gets some products directly from China. The company is also reliant on supplies of some critical metals, exports of which China is clamping down on.

Such actions, the company has previously warned, could lead to disruptions to supplies of components it needs, manufacturing delays, and inventory shortages.

Other related stocks slumped in early trading, including hard disk data storage makers Seagate Technology Holdings and Western Digital — also exposed to Asian supply chains — and server maker Dell.

Chip giants Nvidia and Broadcom were also down more than 3% each after Advanced Micro Devices announced a new deal to deploy its chips in Oracle data centers.

While previous announcements to that effect lifted the AI sector as a whole, the AMD deal wasn’t enough offset the pall cast by the renewed China stress.

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