Why Nvidia Stock Rallied Another 3% Today
Shares of top semiconductor company Nvidia (NASDAQ: NVDA) were rallying 3.4% today as of 2 p.m. ET. There was no specific financial news causing this, but Nvidia is making a comeback along with other growth stocks after being hit hard during the first half of 2022. Nvidia is up over 16% in the last five trading days alone, though it remains off 54% from all-time highs.
There was some non-financial news impacting Nvidia in the last week. The U.S. Senate is getting ready to vote on the Chips Act, some $52 billion in subsidies aimed at bolstering the American semiconductor industry. To be clear, this funding -- if passed -- won't directly help Nvidia. The Chips Act is geared toward chip manufacturing, providing money to build and upgrade chip fabs in the U.S. to increase domestic production. Nvidia designs chips, it doesn't manufacture them.
However, given the global chip shortage the last two years, fabless chip companies like Nvidia that tap chipmaker partners to fulfill customer orders could still benefit indirectly from the Chips Act. Nvidia CEO Jensen Huang has talked about the need to build more redundancy into the business to mitigate future supply chain disruptions. He even said Nvidia could partner with Intel's new foundry services business -- a business that most definitely would get a boost if the Chips Act is passed.
Source Fool.com
