Nvidia stock was edging up early Tuesday at the end of an underwhelming first half of the year. The chip maker is looking to its next-generation hardware to spark a rally but gains might be muted for a while yet.
The shares were rising 0.4% to $195.75 in premarket trading. The stock is up 4.5% this year as of Monday's close. However, it lags far behind the 94% gain for the PHLX Semiconductor Index for the same period.
The major issue for Nvidia is that the huge spending on AI chips is now being spread out among a wider range of semiconductor companies. Initial competition with Advanced Micro Devices has now broadened to include custom chip designers and specialists in central-processing units, including Intel.
The key question is whether Nvidia's next-generation Vera Rubin hardware establishes such a performance gap that the company returns to being the clear top choice for AI infrastructure.
However, even impressive performance might not convince Big Tech companies to rely predominantly on a single supplier, especially when they are facing questions about the scale of their spending.
"[T]he hyperscalers' share price decline this month points to increasing shareholder pressure to justify their spending, and we acknowledge that the risk of slowing capex growth has risen at the margin," wrote Mark Haefele, chief investment officer at UBS Global Wealth Management, in a research note.
In the short term, Nvidia stock faces a potential obstacle amid news of a raid linked to smuggling of its chips to China.
Taiwanese investigators raided Super Micro Computer's offices as part of an inquiry into alleged smuggling of Nvidia chips to China. Prosecutors targeted six individuals with charges focused on document forgery and breach of trust, The Wall Street Journal reported.
Super Micro said it is cooperating with authorities in Taiwan and other global jurisdictions to protect its technology and intellectual property, the Journal reported Tuesday. Super Micro and Nvidia didn't immediately respond to Barron's requests for comment Tuesday.
Nvidia was named a Barron's stock pick on May 13, when shares were trading at $226.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
June 30, 2026 07:09 ET (11:09 GMT)
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