NVDA Shares Inch Higher Overnight After 4-Day Rout: Chipmaker Reportedly Tells Cloud Clients To Limit China Exposure

• Heads of Marvell and Lumentum reportedly sought Nvidia CEO Jensen Huang's backing before announcing their $115-billion deal.
• Nvidia reportedly told its cloud customers to make sure they sell at least 51% of their services to companies outside China.
• Investors would now turn to AMD’s results, due after market hours, for further clues on the chip market.

Nvidia Corp. (NVDA) shares advanced 0.8% in overnight trading ahead of Tuesday, following a four-session rout, and drew buzz on Stocktwits after a series of news reports speculated on its involvement in the broader AI market.

Nvidia has reportedly instructed its cloud computing clients to scale back their exposure to Chinese companies, the Financial Times reported early in the day, citing people familiar with the matter.

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It told those customers to ensure they sell at least 51% of their services to companies outside China, although the new rules affect only future contracts, the report said. 

In a statement to media outlets, an Nvidia spokesman said: "Longstanding U.S. policy encourages every cloud to build on American infrastructure and to win business everywhere they can. America cannot win the AI race unless America's AI infrastructure wins worldwide -- if the world's clouds rely on foreign-made chips, the model and application layers will be foreign-built as well."

Nvidia’s Role In Marvell-Lumentum Deal

In a separate report, Bloomberg reported that Marvell Technology CEO Matthew Murphy and Lumentum CEO Michael Hurlston sought Nvidia CEO Jensen Huang’s views during a phone call before the deal was announced.

On Monday, Marvell (MRVL) agreed to buy data center components maker Lumentum (LITE) for an implied enterprise value of $115 billion in an all-stock deal. 

Huang supported the deal, according to the report. Nvidia invested $2 billion each in Marvell and Lumentum earlier this year.

Investors Turn To AMD’s Report

Semiconductor investors will now turn to Advanced Micro Devices' (AMD) quarterly report, due after markets close on Tuesday, for further clues.

After Intel’s troubling report last week, Wall Street will peruse AMD’s earnings to determine whether the weakness is Intel-specific or industry-wide.

AMD has guided for revenue of about $13 billion, plus or minus $300 million, and analysts expect $13.09 billion, up 41.5% from a year ago, as per Koyfin.

Retail View On NVDA

On Stocktwits, the retail sentiment for NVDA shifted to ‘bearish’ from ‘neutral’ the previous day, with the ticker trending at the top just before premarket trading.

“$NVDA not enough capital in all the world to finance the AI project through to fruition. That catch 22 will be printed on its tombstone,” a trader wrote.

Another, with a contrarian view, said: “$NVDA has GPU monopoly, earning will be super strong.” The chipmaker will report its third-quarter results on Nov. 17.

Year-to-date, NVDA stock is up 8.6%.

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