Patrick Moorhead: Nvidia, AMD Sell-off Over China Policy 'Makes No Sense'

AI Demand and China Policy

• 💡 The current sell-off in Nvidia and AMD stock, driven by China policy headlines, is described as a complete overreaction.
• 🎯 Nvidia has zeroed out all revenue for China in its forecasts, which is seen as a left-brain, emotional reaction rather than a logical business decision.

Manufacturing vs. Chip Production

• ⚠️ While companies like Apple rely on China for manufacturing, the argument is that Nvidia and AMD's business models are different.
• 🔬 China manufactures smartphones and PCs but not the leading-edge chips that are crucial for hyperscalers.

Market Overreaction and Infrastructure Cycles

• 🚀 The speaker notes that the market has been looking for any reason to sell off due to the significant run-up in stocks across the AI ecosystem.
• 📈 This current AI investment cycle is described as unprecedented, even eclipsing the dot-com era.
• 🌍 A true trade war involving Taiwan, where most leading-edge chips are made, would be a more significant concern than current China policy headlines impacting chip companies.