What happened
After falling early in Thursday's trading session, Nvidia (NVDA 2.13%) pulled out of a deep dive to finish the day up by 1.1%. On Friday, it has been building on that momentum to post even stronger gains.
As of 1 p.m. ET, shares of the popular semiconductor stock were up a solid 5.5%.
Image source: Getty Images.
So what
What was it that weighed on Nvidia initially in Thursday trading, and why is it recovering so strongly Friday? The answer is the M1 Ultra -- Apple's (AAPL 1.62%) new superchip.
As an article on Yahoo Finance noted on Wednesday, the M1 Ultra semiconductor chip will be "a problem" for Nvidia -- and for other semiconductor companies such as AMD and Intel, as well. Apple's new homegrown chip is so good and so fast, asserted the Yahoo! article, that a Mac Studio computer powered by the M1 Ultra "can smack around" a far more expensive Mac Pro powered by a combination of an Intel chip and AMD graphics card, for example -- and presumably would also outperform one that switched out the AMD card for one from Nvidia.
Now what
Not so fast, though! According to an article on TheVerge.com, it turns out "the M1 Ultra is not more powerful than an RTX 3090" GPU from Nvidia (emphasis added).
After putting a new Mac Studio through its paces, TheVerge concludes that, in fact, "the M1 Ultra isn't actually faster than an RTX 3090, as much as Apple would like to say it is" (emphasis in the original). "To hear Apple tell it," the article continues, "the M1 Ultra is a miracle of silicon, one that combines the hardware of two M1 Max processors for a single chipset that is nothing less than the 'world's most powerful chip for a personal computer.'"
Were that true, then the logical conclusion might be that, over time, Nvidia chip sales would go down as M1 Ultra chip sales go up. If TheVerge is right, however, and "RTX 3090 has a lot more power" than the M1 Ultra (emphasis still in the original), then maybe Nvidia really doesn't have so much to worry about here.
It's this conclusion, I suspect, that's sparking the relief rally in Nvidia stock Friday.
