Nvidia's market capitalization reached $4.27 trillion, making it the largest component of the S&P 500. The top 10 S&P 500 stocks now represent 40% of the index's market capitalization. Nvidia's share-price gains have been a primary driver of benchmark performance, increasing concentration risk and exposing the index to downside if Nvidia falls. Nvidia ordered suppliers to halt production of H20 chips built for the Chinese market after Beijing urged local firms to avoid those chips and prefer domestic suppliers. Nvidia and AMD agreed to forfeit 15% of their China chip sales to obtain U.S. export licenses amid security concerns.
Nvidia's (NVDA) $4.27 trillion market cap leads the S&P 500, where the top 10 stocks account for 40% of its value. NVDA has been a primary driver of the benchmark index's gains and a drop in its stock could cause the index to tumble. Yet Nvidia's AI-driven rise reflects surging demand for its accelerators amid a concentrated market. Nvidia made early investors rich, but there is a new class of 'Next Nvidia Stocks' that could be even better.
Reuters report a significant new hurdle emerged when Nvidia ordered its suppliers to halt production of its H20 chips tailored for the Chinese market. It follows a directive from Beijing urging local tech firms to not use the H20 chips and prioritize domestic suppliers. Although not a requirement, its effect is the same. The edict came after Nvidia (and Advanced Micro Devices ( NASDAQ:AMD) agreed to forfeit 15% of their chip sales in China to the U.S. government in exchange for gaining new export licenses.
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