AI Chipmakers Nvidia, AMD Hit By U.S. Restrictions
Chips for AI technologies from leading producers crashed on Tuesday following US government decisions that impact China’s semiconductor trade.
Nvidia as the market leader alerted investors that it faces a $5.5 billion sales reduction during its next financial period thanks to the export restriction. Nvidia will no longer sell its H20 chips to China, although the company named this region its main growth area.
The market reacted immediately as Nvidia’s stock price plummeted 7.46%, while AMD saw its value drop by 6.97%. Other semiconductor businesses joined in by taking major drops when investment firms sold their stocks. The biggest victims were Micron Technology, Broadcom, and ASML from the Netherlands.
China Defends Economy Amid U.S. Tariffs
Semiconductor company market value wiped out $2 trillion during recent months, mostly due to growing regulatory challenges and worsened US-China trade issues. The government of China rapidly reacted to the news.
The Kobeissi Letter sources say Beijing admitted these challenges exist but denied any economic harm caused by them. Officials explained that the U.S. 245% tariff on Chinese imports remains in effect and they will maintain their defense in the ongoing trade dispute.
The conflict changed from an economic matter into a showdown between political systems, according to Kobeissi. This market situation presents a special moment when buyers and sellers feel uncertain about the market direction.
Markets operate under constant threat of new events that create disproportionate market movements, while investor sentiment stays at high risk.
Kobeissi explains that questionable news stories are making markets bounce between hundreds and trillions of dollars due to increased market volatility. Kobeissi predicts there will be more market turbulence and rapid trading responses until investors stop relying on tariffs.
According to crypto analyst Ali Martinez, the chip ban in China creates a possibly favorable outcome for NVIDIA to break through its $55 200-week moving average. The analyst sees current market conditions as an optimal moment for investors to purchase NVIDIA’s stock for extended holding periods.
