NVDA: Nvidia Stock Drops as Traders Fear Exports to China May Tighten Up

Chip maker was lower by about 2% in pre-market trading Wednesday. Will the White House tighten the screws on exports even more?

🤔 Nvidia Dips on Chip Export Fears

• Nvidia stock NVDA was sliding ahead of the opening bell Wednesday with shares showing an implied loss of about 2%. Renewed fears around the company’s business in China sent investors scrambling after the White House on Tuesday added tens of Chinese companies to a trade blacklist.
• One of those affected by the rules is Inspur Group — a few of its subsidiaries were added to the list. Inspur is China’s largest server maker and one of the key Chinese customers of Nvidia.

🍔 Nvidia Sandwiched Between US and China

• The possibility of stricter regulatory guardrails around Nvidia’s chip exports is real on both sides. In the US, Donald Trump’s 20% tariffs on Chinese imports are forcing US companies to do business with each other instead of paying one-fifth extra to import a ready-made product.
• In China, the regulators have been actively pushing their own agenda by throwing shade on Nvidia’s H20 chip and encouraging domestic businesses to produce homegrown alternatives.

📉 Mag 7 = Lag 7?

• It hasn’t been a smooth start of the year for Jensen Huang’s chip giant. Shares of Nvidia are showing a loss of 13% year to date. In all fairness, every member of the elite Mag 7 club has been hit by widespread selling. Meta stock META is the only one above the flatline, flexing a 5% gain.
• The biggest loser, as you might suspect, is Tesla TSLA. The EV maker, and the retail crowds’ stock pick, has seen its share price dwindle by 24% year to date as Musk’s foray into politics has dented Tesla’s brand image and market share.