Xpeng Stock (XPEV) Reverses Despite Chips Powering Past Nvidia

Chinese automaker Xpeng (XPEV) has thrown down the gauntlet to semiconductor firm Nvidia (NVDA), claiming that it has developed more powerful chips than its rival for use in autonomous cars.

Despite this, its stock was 2% lower in pre-market trading. NVDA was down over 1%.

Self-Designed

Xpeng said it expects German manufacturer Volkswagen (VWAPY) and other automakers to start using its self-designed Turing AI chips. Indeed, it is understood that the chips will be put in place in some VW models for launch in China in 2026 and that Xpeng is in talks with other car makers about future tie-ups.

It is reported that VW and Xpeng are jointly developing two cars for the “mid-class segment.”

He Xiaopeng, chief executive of Xpeng, said the group was designing chips for use in cars, robotics, and aircraft. “We need a type of chip that can support these platforms and also power our large language model,” he told the Financial Times.

Xpeng is said to be plowing $700 million a year into developing its AI arsenal, leading to developments such as voice-controlled smart cabin systems in its cars.

Overtaking Nvidia

Xiaopeng said the computing power of its Turing chip was three times greater than Nvidia’s autonomous driving chip, Orin-X.

Demand for self-driving vehicles and AI auto services, tools, and processes is expected to grow over the next few years. Chinese chip makers are ramping up their output as car manufacturers, especially those in Europe, look for new suppliers.

However, there are challenges given political pressures around the security of using Chinese suppliers as well as concerns over trade tariffs.

Is XPEV a Good Stock to Buy Now?

On TipRanks, XPEV has a Moderate Buy consensus based on 8 Buy, 3 Sell and 1 Hold ratings. Its highest price target is $31. XPEV stock’s consensus price target is $25.83 implying a 26.43% upside.

See more XPEV analyst ratings