Traders are buzzing about Nvidia (NASDAQ:NVDA) stock today. There are two likely explanations: recent comments from analyst Ray Wang and new licensing requirements from the U.S. government.
First off, Ray Wang recently argued that a popular group of stocks — called “FAANG” stocks — should be changed to a different group entirely. Wang calls this group “MATANA” and includes NVDA stock among the names.
You’ve probably heard about technology-focused FAANG stocks before. The group includes Meta Platforms (NASDAQ:META) (formerly Facebook), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). Television personality Jim Cramer first coined the term “FAANG” in 2013, when the five companies dominated the U.S. tech market.
That said, Constellation Research Principal analyst and founder Ray Wang feels it’s time to change the focus from FAANG to MATANA. This new acronym includes Microsoft (NASDAQ:MSFT), Apple, Tesla (NASDAQ:TSLA), Alphabet, Nvidia and Amazon. Notably, Netflix and Meta Platforms aren’t included in the group anymore. The new inclusion of NVDA stock likely has traders talking.
On top of this news, however, investors are still probably considering another recent development. This involves the impact of new licensing requirements on Nvidia.
Licensing Requirements May Be Problematic for NVDA Stock
Today, a new article from the Wall Street Journal is reminding traders of a notable problem for Nvidia. Evidently, recent financial reports “showed the chip maker’s business being hit hard by growing inventory and slipping demand.” According to WSJ, Nvidia could also lose “as much as $400 million in quarterly sales” due to new licensing requirements imposed by the United States.
Apparently, the U.S. will now require a license for future exports of certain types of chips to China and Russia. Nvidia doesn’t rely on Russia for significant chip sales, but curtailing shipments to China could weigh on its bottom line.
In fact, the WSJ even went so far as to state that the China chip-shipping restriction could affect Nvidia’s outlook for “about $5.9 billion of sales in the current quarter.” Investors may be considering this impact today in a sort of delayed reaction, consequently selling NVDA stock.
Still, Nvidia shares are down less than 1% as of this writing. As the company joins the MATANA club, traders may decide to buy more NVDA in the near future.
On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
