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Nvidia (NVDA) stock is falling 3% today after the U.S. government unveiled new restrictions on the export of advanced chips known as graphics processing units (GPUs). Nvidia specializes in developing and marketing those semiconductors that are used to create artificial intelligence.
However, investment bank Wedbush stated today that it remains upbeat on NVDA and a number of its large-tech peers.
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The New Restrictions
Under the new rules, the number of GPUs that can be shipped to most other countries will be limited to 50,000. However, countries can obtain a license to obtain more of the chips, the purchases of about 18 U.S. allies will not be restricted, and orders of up to 1,700 chips will not be limited.
“The United States must act decisively to lead this transition by ensuring that US technology undergirds global AI use and that adversaries cannot easily abuse advanced AI,” the White House said in a statement today.
Wedbush Remains Bullish on Multiple Large-Tech Names
Nvidia is one of the large-tech stocks that investors should own despite the market's recent volatility, Wedbush's well-known analyst, Dan Ives, wrote in a note to investors today.
The recent increase in bond yields has created "a tricky time for the tech sector" amid concerns about valuations, according to Ives. But the analyst is still bullish on many of the most famous large-tech names, including Nvidia.
While we acknowledge the potential of NVDA, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.