By Arsheeya Bajwa and Aditya Soni
(Reuters) -Global chip stocks were battered on Wednesday on fresh evidence of how U.S. President Donald Trump’s shifting trade policy was complicating the outlook for semiconductor and computing giants, including AI pioneer Nvidia and its rival AMD.
Attempts to reorient global trade through tariffs and export curbs have started to show the effect as Nvidia warned of a $5.5 billion hit after Washington restricted exports of its AI processor tailored for China, while Dutch chip-making tools giant ASML raised doubts about its outlook.
The U.S. restriction, which also hit the MI308 processor of Advanced Micro Devices, marked the latest blow for the AI chip trade that is losing steam after a two-year rally as tariff threats and fears over Big Tech’s spending weigh on sentiment.
Nvidia shares closed down nearly 7% on Wednesday, with the company losing more than $148 billion in market value. AMD fell 5.8% as it warned of a $800 million hit from the latest curb, while AI-related chip stocks including Arm, Broadcom and Micron dropped between 2.5% and 4.6%.
Nvidia said on Wednesday that it follows the U.S. government’s directions on where it can sell its chips after the U.S. Commerce Department announced on Tuesday it was issuing new export licensing requirements for Nvidia’s H20 chips.
“The U.S. government instructs American businesses on what they can sell and where — we follow the government’s directions to the letter,” Nvidia said.
“The technology industry supports America when it exports to well-known companies worldwide – if the government felt otherwise, it would instruct us,” the company added.
Tightening U.S. export curbs have in recent years made it harder for American chipmakers to tap the Chinese market, but the country remains a key source of revenue.
“The U.S. export restrictions on Nvidia’s H20 chips highlight the growing geopolitical uncertainty enveloping the tech and semiconductor sectors, particularly under Trump-era-style policy reversals,” said Michael Ashley Schulman, chief investment officer at Running Point Capital.
“This unpredictability rattles businesses and investment markets, as evidenced by Nvidia’s selloff this morning and broader pressure across chip stocks.”
Nvidia drew over 13% of its sales, or about $17 billion, from China in its last financial year, although that was down from 21% in fiscal 2023. For AMD, China was its second-largest market last year, accounting for more than 24% of total sales.
