Nvidia China Approval, Micron Earnings, Tesla Fab: Mar 22

Several concrete developments moved AI chip stocks this week: China approved Nvidia chip sales, Micron reported earnings against high expectations, and Tesla confirmed plans for its own semiconductor fabrication facility.

Key points

• China approved AI chip sales from Nvidia, pushing the stock higher earlier this week, according to Investing.com.
• Wall Street analysts still see substantial upside in both Nvidia and Micron, with price targets implying roughly 80% and 50% gains respectively, per Yahoo Finance.
• Tesla is planning to build its own semiconductor fabrication facility to reduce its dependence on external chip suppliers, though Morgan Stanley has flagged the costs, tooling requirements, and timeline as significant challenges, Seeking Alpha reports.
• Elon Musk confirmed that both SpaceX and Tesla will continue ordering Nvidia chips at scale as Tesla designs its fifth-generation AI chip for autonomous driving systems, including Full Self-Driving software, according to the Economic Times.
• Meta’s recent custom AI chip announcement is drawing attention from Broadcom investors, given Broadcom’s role in supplying custom silicon to hyperscalers, per Investing.com.

What the China approval means for Nvidia

China clearing Nvidia’s AI chip sales removes a near-term regulatory overhang that had weighed on sentiment. The approval matters because China has historically been a meaningful revenue geography for Nvidia’s data center products, even as export controls have narrowed what can actually be sold there. The stock responded positively to the news.

Combined with Musk’s public confirmation that Tesla and SpaceX will keep buying Nvidia chips at scale, the demand picture from two high-profile customers remains intact. Tesla is simultaneously designing its own fifth-generation AI chip for autonomy workloads, but that internal program does not appear to be a near-term replacement for Nvidia silicon. It looks more like a long-term hedge than an imminent shift in purchasing.

Is Tesla’s chip fab ambition realistic?

Tesla building its own semiconductor fabrication facility would represent a significant departure from the fabless model most technology companies use. Morgan Stanley’s caution is pointed: the costs involved, the specialized tooling required, and the years-long timelines typical of semiconductor fabs make this a very different kind of project than building a car factory or a battery plant, per Seeking Alpha.

For investors, the relevant question is whether this signals Tesla’s seriousness about controlling its AI supply chain or whether it becomes a costly distraction. At this stage, the project is confirmed but details on scale, timeline, and capital commitment remain thin. It bears watching alongside Tesla’s chip design roadmap.

Micron and Microsoft: two different kinds of uncertainty

Chip and AI stocks were mixed heading into Micron’s earnings earlier this week, with the market broadly expecting an upside result, according to Seeking Alpha. Micron’s memory products sit directly in the path of AI infrastructure buildouts, particularly high-bandwidth memory used in accelerator chips, which is why analyst price targets remain elevated despite a volatile broader tape.

Microsoft presents a different picture. Azure growth is described as robust, but analysts are flagging margin pressure as a concern through the rest of the year. A recent share price decline has prompted some investors to reassess, though the current view from at least one analyst is a Hold rather than a Buy, per Seeking Alpha. For AI infrastructure investors, Microsoft’s capital spending trajectory matters as much as its reported growth rate, and that spending is not slowing.

The week’s news reinforces a pattern that has held for several months: AI chip demand signals remain strong across multiple sources, but individual stock valuations and margin profiles are forcing investors to be more selective than they were a year ago. Nothing here is investment advice.