Nvidia (NVDA) stock fell as much as 4% Thursday, extending the AI chipmaker’s nearly 7% decline the prior day after disclosing that the US government had effectively banned exports of its chips to China.
Nvidia said in a regulatory filing late Tuesday night that it would take a $5.5 billion hit in the first quarter due to the ban on sales of its H20 chips made specifically for the Chinese market to comply with ever-tightening US trade rules.
The stock’s drop on Thursday put Nvidia’s market cap at just under $2.5 trillion, meaning the company has shed more than $250 billion since the tighter trade rules were disclosed.
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JPMorgan analyst Harlan Sur said in a note late Wednesday afternoon that he estimates the change would reduce Nvidia’s full-year data center revenue and earnings per share by 8% to 10%. In other words, Nvidia would see $15 billion to $16 billion in lost revenue. Jefferies analyst Blayne Curtis predicted a more modest $10 billion hit to revenue.
The chip trade curbs from the Trump administration took Wall Street by surprise, given a recent report from NPR that Trump had backed off its plans to restrict Nvidia’s H20 chips following a dinner with CEO Jensen Huang at Mar-a-Lago.
Nvidia declined to comment on the matter.
Just two days after the company’s disclosure on Tuesday, Huang traveled to Beijing at the invitation of a domestic trade group, Bloomberg reported Thursday.
Earlier this week, Nvidia said it will produce up to $500 billion of AI infrastructure in the US within the next four years as the tech industry looks to bolster its domestic manufacturing footprint in the face of Trump’s aggressive approach to trade policy.
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Trump began preparations to impose tariffs on semiconductors this week as the Commerce Department opened a probe Tuesday into computer chips under Section 232 of the Trade Expansion Act of 1962, which grants the president the authority to impose tariffs on imports seen as essential to national security. Trump has promised that most electronics will still get wrapped up in his tariffs.
“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations,” he posted Sunday.
Other chip stocks dropped more modestly Thursday after widespread declines the prior day.
Nvidia rival Advanced Micro Devices (AMD), also hit by the US’s new restrictions on chip exports to China, fell 1%. Broadcom (AVGO) dropped 1.7%, Micron (MU) dipped 2.2%, and Intel (INTC) fell 2.6%.