Nvidia Stock Falls 6% on Rumors of Chip Sales Curbs to China
Nvidia (NVDA) shares plummeted 6% on Wednesday amidst reports that the Trump administration may impose additional restrictions on the company's chip sales to China. Bloomberg reported that talks are in their early stages, and the potential measures could target Nvidia's H20 chips, designed to adhere to existing US export controls.
In response, Nvidia stated that it remains cooperative with the government's approach to AI, emphasizing that performance thresholds set by the Biden Administration are based on levels achieved by leading technology products several years ago.
The news follows a turbulent week for Nvidia shares, with Monday witnessing its largest single-day market capitalization loss in history. Investors expressed concerns over a cost-effective AI model from DeepSeek, a Chinese startup, which claims to utilize less expensive chips and data. This raised fears of potential impacts on AI chip sales and the market dominance of US hyperscalers.
On Tuesday, Nvidia recovered 9% as many Wall Street analysts dismissed the sell-off as excessive. However, Wednesday's decline suggests that the stock may face continued uncertainty. Investors will closely monitor updates from Nvidia's key customers Tesla (TSLA), Microsoft (MSFT), and Meta (META) for insights into current AI chip demand.