Quick Hits: U.S. chip restrictions, artificial intelligence and oil moves

📉 The U.S. is restricting China’s access to technology, and Nvidia is taking the fall. Nvidia (NASDAQ:NVDA) fell 8% yesterday after reporting that U.S. officials implemented licensing requirements — banning sales of select advanced chips to China and Russia.

• Nvidia expects a $400M impact on their sales this quarter (~6.8% of sales) — a big hit, especially as the company rides a slowing PC and gaming market.
• Instead, Nvidia is working with Chinese customers to replace purchases with alternative products — which could come at a higher cost and lower speeds.

Competitor AMD (NASDAQ:AMD) also fell 3% — receiving similar restrictions — but said the rules won’t have a material impact.

📉 Oil prices pull a complete U-turn in the past two weeks — rising 13% just to lose their gain. In the past three months, crude oil prices are down 25% and U.S. retail gasoline prices have fallen over 20% from their June highs.

There’s an ongoing battle between supply and demand:

• Supply: Analysts continue to warn of energy shortages — with one Goldman analyst even calling for oil at $120 per barrel (40% upside).
• Demand: A potential recession could drag down oil demand and prices.

📉 Artificial intelligence (AI) isn’t recession-proof. C3.ai (NYSE:AI) — which helps large organizations analyze data and implement industry-specific applications — fell 19% yesterday after reporting earnings with disappointing sales forecasts.

• The company was overhyped upon going public in 2020 — falling more than 90% since.
• CEO Tom Siebel said customers are “scrutinizing big deals as never before” — a troubling sign for the company which had just 218 customers at the end of its January 31, 2022 quarter.