What Happened?
Shares of leading designer of graphics chips Nvidia (NASDAQ: NVDA) jumped 4% in the afternoon session after Morgan Stanley reiterated its "overweight" rating on the stock, and a U.S. official confirmed the company has begun shipping its powerful H200 AI chips to China.
The investment bank highlighted that Nvidia remains its top semiconductor pick, with management describing "accelerating growth rates" even as revenue nears $100 billion per quarter. Separately, a top U.S. commerce official told Congress that while the number of H200 chips shipped to China so far was "very few," the shipments have commenced.
The stock's advance was also supported by a general rebound among semiconductor companies following a cooler-than-expected June inflation report as a surprise capital expenditure warning from IBM appeared to validate AI hardware demand.
June core CPI printed flat month-over-month (2.6% year-over-year versus a 2.9% forecast), reopening the door to a friendlier interest rate environment. The soft inflation print lowers the discount rate, which benefits high-multiple semiconductor valuations.
The shares closed the day at $211.86, up 4% from the previous close.
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What Is The Market Telling Us
Nvidia’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock dropped 3.7% after a report that South Korea's SK Hynix is slowing its high-bandwidth memory (HBM) expansion rattled the AI-chip complex.
The headline sounds bearish for AI, but the underlying report is a margin story, not a demand story. SK Hynix is deliberately slowing its HBM4 ramp to redirect capacity into conventional DRAM, where shortages have pushed operating margins above HBM's. Korean analysts pegged the margin gap at more than 15 points.
HBM is the memory bolted onto Nvidia's AI accelerators, so any "slowing HBM" signal instinctively sparks fears the AI build-out is cooling which is why the reflex was to sell. The more accurate read is that all three memory makers are running the market tight (Samsung flagged a 146% DRAM ASP jump in Q1, SK Hynix mid-60%), keeping pricing power with sellers.
The bigger driver appeared like profit-taking after a parabolic run. Micron rose ~300% since the start of the year, colliding with a hawkish rate shift: traders pricing 50bps of Fed hikes by December under new Chair Kevin Warsh, making debt-funded AI capex harder to justify at record valuations. The divergence confirmed it: memory names took the brunt (Micron −11%) while logic-heavy Nvidia fell only ~3.6%. Wedbush framed the drop as a buying opportunity with enterprise demand intact.
Nvidia is up 12% since the beginning of the year, but at $211.58 per share, it is still trading 10.2% below its 52-week high of $235.74 from May 2026. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $10,664.
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