Nvidia stock was falling on Tuesday as selling continued to hit AI and chip stocks after a brief reprieve on Monday from a two-week rout. Not even rumors of major chip purchases from China look like being enough to buoy Nvidia.
Nvidia was down 0.8% in premarket trading on Tuesday after the shares gained 1.4% on Monday. The stock has lost more than 10% of its value in the last two weeks amid a selloff slamming the chip sector driven primarily by worries over the mounting debt and spending required to fuel the artificial-intelligence boom.
A piece of fundamental news on Tuesday could have been an opportunity for the shares -- which remains below the 50-day simple moving average of its price, a typical support level -- to rally.
Chinese tech giants Alibaba, Tencent, and ByteDance have ordered more than 3 million Nvidia RTX PRO 550 graphics cards that carry a collective sticker price of more than $35 billion, Reuters reported, citing two people familiar with the deal.
Such a deal would signal continued strong demand from Chinese tech companies for Nvidia's chips, despite US restrictions on Nvidia exports and as some companies, like Alibaba, turn to making their own chips.
Those Chinese orders would be significant at a time when chip supply remains tight, and prices high. In fact, Nvidia has told partners it cannot guarantee it can fill the orders, which exceed planned production, Reuters reported.
Nvidia did not immediately respond to a request for comment from Barron's early Tuesday.
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