Nvidia inventory falls as China’s Huawei reportedly boosts AI chip manufacturing after Trump’s export ban

Nvidia (NVDA) inventory fell 5.5% noon Monday after a report from Reuters stated Chinese language tech large Huawei is about to start delivery superior AI chips as quickly as subsequent month, after Trump’s new export guidelines successfully banned the corporate from promoting its H20 chips in China.

Huawei’s new 910C chips are reportedly aggressive with Nvidia’s H100 AI chips, that are two generations behind its newest Blackwell chips. The H100 GPUs (graphics processing items) had been banned from export to China by the US authorities in 2022.

Although Nvidia has tailored to a number of new US commerce guidelines by creating chips particularly for the Chinese language market, the ever-tightening restrictions imply these chips are far much less highly effective than their mainstream counterparts.

The report of the newest Huawei chip comes almost one week after Nvidia stated the US authorities had successfully banned gross sales of its H20 graphics processing items — a model of its H100 AI chips made for Chinese language customers to adjust to US commerce guidelines.

The Home Choose Committee on China additionally launched an announcement saying it was “demanding solutions” from Nvidia about whether or not it had beforehand complied with commerce restrictions.

Fellow chip shares additionally dropped Monday. Broadcom (AVGO) sank as a lot as 4%, whereas Superior Micro Units (AMD) (additionally topic to the brand new US export guidelines) fell 3%. Qualcomm (QCOM) dipped 2%.

Learn extra about tech inventory strikes and immediately’s market motion.

Nvidia disclosed final week that it’ll file a $5.5 billion hit from misplaced stock and contracts within the first quarter as a result of change in commerce coverage. JPMorgan analyst Harlan Sur projected that, total, Nvidia will lose as a lot as $16 billion within the present fiscal yr from the H20 ban.

Bernstein analyst Stacy Rasgon stated final week in a observe to traders following the information: “Banning the H20 makes little sense to us … a ban basically merely palms the Chinese language AI market over to Huawei.”

China accounted for $17 billion, or 13%, of Nvidia’s income in its fiscal yr 2025, Rasgon famous.

Shares of Nvidia fell 7% the day after the restriction was introduced. The corporate noticed roughly 8%, or $230 billion, erased from its market cap final week.

Nvidia CEO Jensen Huang visited China and met with commerce officers in Beijing final week, and the corporate is concurrently seeking to broaden its home manufacturing footprint, pledging $500 billion to the US AI provide chain buildout final week.

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Nvidia has stated it follows commerce guidelines “to the letter,” and the corporate was important of tightening US commerce coverage below the prior administration.