By Denny Jacob
Export restrictions placed on certain chips manufactured by Nvidia have weighed on other chipmakers, and shares of Broadcom, Qualcomm and others declined Wednesday.
Nvidia, which has become a proxy for chipmakers given its booming valuation and chips powering artificial-intelligence capabilities, faces new hurdles. The chip company on Tuesday said it would record a $5.5 billion charge on its quarterly earnings and disclosed the U.S. will now require a license for exporting the company's H20 processors to China and other countries.
Wedbush analysts said that, while the financial impact is relatively small, the requirement is a strategic blow to Nvidia going after the China market as a trade war develops between the U.S. and China.
Investors appear to be betting that such restrictions mean greater risk to business operations to Nvidia and others, raising questions about their valuations and prospects in a scenario in which the two largest economies continue to impose levies against each other.
Nvidia was down 6.8% to $104.56 in premarket trading. Broadcom declined 4.3% to $171.34, Qualcomm was off 2.9% to $134.64, and Micron Technology shed 5.7% to $67. Marvell Technology declined 5.1% to $50.62, and Advanced Micro Devices retreated 7.7% to $87.94.
While announced tariffs have caused a broader selloff, companies in the technology space have faced particular challenges, as questions about valuations had been bubbling before the Trump administration announced tariffs. Uncertainty about the administration's approach and desired endgame have increased as tariffs have been announced and paused. While certain products, including electronics at large, have appeared to be exempted, definitive measures have changed over short periods.
Write to Denny Jacob at denny.jacob@wsj.com
(END) Dow Jones Newswires
April 16, 2025 09:23 ET (13:23 GMT)
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