Shares of AI chipmakers companies such as Nvidia and AMD plunged sharply as the U.S. government announced new export restrictions on AI chips to China. Nvidia warned it will take a $5.5 billion financial hit in its fiscal first quarter due to the ban, which effectively bars sales of the H20 chip in one of its largest and fastest-growing markets.
The announcement caused semiconductor stocks to experience a broader market decline as AMD, Micron Technology, Broadcom and ASML experienced significant price drops. Semiconductor companies have experienced a $2 trillion market value decline during the last three months because of increasing trade conflicts and regulatory risks.
According to the Kobeissi Letter reports, China stated that it is aware of these restrictions and its goods are facing a 245% US tariff. However, they will ignore the numbers game. China says that it will fight until the end of the tariff war.
In this situation, Adam Kobeissi says that investors are experiencing a highly uncommon phenomenon in financial markets. Both bullish and bearish entities feel uneasy amid prevailing conditions. He stated,
“An over-reliance on tariff-related headlines has created a fragile market environment, where both sides are exposed to abrupt, often disproportionate price swings. Even headlines with questionable credibility are driving trillions of dollars in market cap in either direction. Until this sentiment dissipates, volatility will remain.”
At the time of writing, the Nvidia stock price is down by 7.46% and the AMD stock price is down by 6.97%, demonstrating extreme bearishness.
One of the famous crypto analysts, Ali Martinez, stated that the chip ban in China strengthens the case for NVIDIA for a potential retest of the 200-week MA at $55. Ali says it is a good buying opportunity for long-term investors.
Also Read: Nvidia to Produce AI Supercomputers in US Amid Tariff Fears
