Warnings from chipmakers Nvidia Corp. and Advanced Micro Devices Inc. about higher costs related to new controls on exports to China sparked yet another slump in technology stocks today.
In a filing late Tuesday, Nvidia said it’s expecting to take a $5.5 billion hit in the first quarter after being told by the Trump administration that it cannot export its H20 graphics processing units to China without a special export license. It will also be required to obtain a license to ship the chips to other countries suspected of providing a back door route for those products into China, the company said.
Nvidia’s H20 chip was designed specifically to adhere to earlier U.S. export restrictions introduced by former President Joe Biden in 2023. It’s a scaled-down version of the company’s most advanced chips, with lower bandwidth and throughput. It’s still used to train sophisticated artificial intelligence models such as DeepSeek Ltd.’s R1. Analysts estimate that it generated around $12 billion to $15 billion in sales for the company last year.
Earlier today, Nvidia’s rival AMD announced in a filing that it’s expecting to take an $800 million hit related to the new curbs, which also prohibit the export of its MI308 GPUs to China.
The updates by Nvidia and AMD are yet another reminder of the risk to growth in the semiconductor and broader technology industries posed by Trump’s ongoing trade war with China, which has also resulted in numerous tariffs being slapped on Chinese-made products. While the White House has announced some exemptions for tech-related products, including computer chips, laptops and smartphones, it has said that these are only temporary. Trump himself said on Sunday that an announcement regarding a new semiconductor tariff will be made “over the next week.”
In addition, Trump’s administration has launched an investigation that could result in yet more tariffs being imposed on critical “rare earth minerals,” which are essential components of tech products such as smartphones, batteries and sensors.
Sentiment in the semiconductor industry was worsened by a disappointing financial report from the Dutch chipmaking equipment manufacturer ASML Holdings N.V., whose results are often seen as a bellwether for the industry.
ASML missed expectations on sales and orders, blaming tariffs for creating “demand uncertainty.” Its stock fell more than 7% on the report during today’s trading session.
ASML’s disappointing results had a knock-on effect on other semiconductor manufacturing suppliers Applied Materials Inc. and Lam Research Corp., whose shares fell by about 5%.
Nvidia’s stock was down more than 6% today, while AMD plummeted 7%. Other chipmakers, including Micron Technology Inc., Marvell Technology Inc. and Broadcom Inc., slipped by about 2%. The VanEck Semiconductor exchange-traded fund was down more than 4%.
The negative sentiments around chip stocks also dragged down many other tech-related stocks, with Meta Platforms Inc., Apple Inc., Amazon.com Inc. and Microsoft Corp. all falling by around 3%, Tesla Inc. down 5% and Google LLC’s parent company Alphabet Inc. down 2%.
Image: News/Dreamina
Your vote of support is important to us and it helps us keep the content FREE.
One click below supports our mission to provide free, deep, and relevant content.
Join our community on YouTube
Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.
THANK YOU
