Nvidia’s stock took a hit, falling 2.8% on Tuesday after reports surfaced about the Trump administration’s plans to tighten US export rules for the chip sector, aimed at limiting China’s progress in AI technology. The proposed measures include sanctions on specific Chinese companies and further restrictions on international firms maintaining semiconductor equipment in China.
This news follows the recent introduction of cost-efficient AI models by Chinese firm DeepSeek, which have impacted US markets. Over the past five trading days, Nvidia’s stock has declined by over 9%, ahead of the company’s fourth-quarter earnings report set for Wednesday. Nvidia’s stock also dropped 4% on Friday and another 3% on Monday, as uncertainties surrounding Trump’s trade policies fueled inflation fears and negatively affected major stock indexes.
Adding to Nvidia’s challenges, Evercore ISI analyst Mark Lipacis indicated that the ramp-up of Nvidia’s latest Blackwell AI chips could be delayed until mid-2025. Despite this, demand for Nvidia’s GPUs remains strong, with customers expected to purchase the existing H100 chips in the interim.
The Blackwell chips have encountered overheating issues and glitches, prompting major customers like Microsoft, Amazon, Google, and Meta to reduce their orders. Despite these setbacks, We maintain a positive outlook on Nvidia’s stock.
