According to a Reuters report, Chinese tech company, Baidu (NASDAQ:BIDU) ordered 1,600 of Huawei Technologies’ 910B Ascend AI chips back in August. Huawei has developed the Ascend AI chips as an alternative to Nvidia’s (NVDA) A100 chip.
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It appears that Baidu had placed the order in anticipation of tightening chip restrictions by the U.S.. In October, the U.S. did place restrictions on the export of AI chips and chip tools to China, including chips from Nvidia.
Baidu’s order is likely to be worth $61.83 million and Huawei is expected to fulfil the entire order by the end of this year. The company’s shift away from Nvidia indicates that Chinese companies have an alternative to the chip giant. Besides Baidu, other Chinese companies including Alibaba (BABA) and Tencent Holdings (TCEHY) have been long time clients of Nvidia.
Reuters cited the unknown source as saying, “They were ordering 910B chips to prepare for a future where they may no longer be able to purchase from Nvidia.”
Is Baidu a Buy, Sell or Hold?
Analysts are bullish about BIDU stock with a Strong Buy consensus rating based on 14 Buys and two Holds. The average BIDU price target of $178.09 implies an upside potential of 64.3% at current levels.
