​​NVIDIA stock price slumps 17% - is there more to come?​

​​​Chipmaker stocks slump across the globe

​The global semiconductor industry faced a significant downturn on Wednesday as chip stocks across the board tumbled. Industry giants like NVIDIA, Taiwan Semiconductor (TSMC), and Advanced Semiconductor Materials Lithography (ASML) saw their shares plummet in response to two major factors: potential tightening of US export controls to China and comments by former President Donald Trump that cast doubt on America's commitment to Taiwan's defence.

​NVIDIA stock price keeps falling

​NVIDIA, the third-largest company in the US by market capitalization and a leader in AI chip technology, saw its stock fall by over 6%. TSMC, NVIDIA's main supplier and the world's largest chip manufacturer, experienced a drop of over 7% in its US stock. Other key players in the semiconductor industry, such as Tokyo Electron and Netherlands-based ASML, weren't spared, with their shares falling by 11% and 12% respectively.

​Chipmakers hit as US government considers rule change

​The Biden administration's consideration of invoking the foreign direct product rule has sent shockwaves through the industry. This measure would allow the US to impose severe controls on any foreign-manufactured products that incorporate even minimal American technology. The administration has reportedly informed allies, particularly in Japan and the Netherlands, that this rule's implementation is likely unless they tighten their own chip-related policies towards China.

​Donald Trump piles on the pressure

​Adding to the industry's woes were comments made by Donald Trump in an interview with Bloomberg Businessweek. The Republican presidential nominee stated that "Taiwan should pay us for defence,"; a remark that raised concerns given Taiwan's crucial role in the global semiconductor supply chain. With around 92% of the world's most advanced chip manufacturing capacity located in Taiwan, and TSMC being the primary supplier for NVIDIA's AI-focused graphics processing units (GPUs), Trump's comments have significant implications for the industry's geopolitical landscape.

​NVIDIA stock price

​NVIDIA is around 17% off its record high. At present, that seems like a dramatic move. But the stock is up around 1000% from the October 2022 lows.

​Pullbacks happen in all uptrends, even in astonishingly-strong and long-lived ones like NVIDIA. A pullback from mid-August until early November 2023 wiped 25% off the price before a new leg higher began, and the stock price dropped 20% in March and April this year.

​The price has yet to test the 50-day simple moving average (SMA), currently $115.69. Below this lies the March high at $97.36.

​Is this the top for NVIDIA?

​Given the huge gains made in NVIDIA over the past two years, it is understandable that many investors are worried that the top has finally been reached for this hitherto-unstoppable stock.

​But history teaches us that it is dangerous to call the end of trends, and the end of any trend is only obvious in hindsight. There are potential risks to the chip industry if Donald Trump is elected, and geopolitical tensions between China and Taiwan cast a long shadow, but it is far from clear that the current pullback marks the end of NVIDIA's long rally.