Nvidia stock price tumbles as US chip restrictions escalate
Nvidia’s made-for-China chips, which were designed to circumvent the chip export restrictions imposed by the US government in 2022, are now hitting the wall.
Nvidia’s made-for-China chips, which were designed to circumvent the chip export restrictions imposed by the US government in 2022, are now hitting the wall. The Biden administration has escalated its efforts to curb the chip exports to China, closing the door for Nvidia’s processors—A800 and H800 chips that tailored specifically for the Chinese market.
Following the official announcement on Tuesday, the share price of the leading AI chip maker plummeted by nearly 5%. Nvidia responded to the new regulation and cautioned that the stricter rules "may impact the company’s ability to complete the development of products in a timely manner and support existing customers of covered products."
In fact, it's not just Nvidia's two chips that have been targeted, any chips falling outside the restricted threshold are now required to be reported to the US government before they can be sold to China. Additionally, countries such as Saudi Arabia, the United Arab Emirates, and Vietnam are also included in the list of nations subject to additional licensing requirements if US companies wish to sell their chips to them. This measure is aimed at closing the loopholes that third parties in these countries might exploit to resell high-end chips to China.
In 2022, Nvidia made over 7 billion US dollars from chip sales to the Chinese market, which includes mainland China and Hong Kong, surpassing their revenue generated in the United States.
Nvidia stock price technical analysis
Based on the daily chart, Nvidia's stock price is currently on the verge of breaking the impressive uptrend that began in January 2023, resulting in a remarkable increase of over 200% so far. However, since reaching its peak in August, briefly touching above $500, it has experienced a nearly 15% downturn over the past two months.
If the price continues to fall below the range of $425-$436, there is a growing probability that it may keep sliding to around $400-$407, a level that would complete the head-and-shoulders pattern and potentially open the floor if the price breaches this level. On the flip side, the near-term resistance is situated at around $450.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Act on stock opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
