Time to Reevaluate Nvidia As NVDA Stock Slumps on $15B Loss Risk
The Nvidia stock price is declining again today, heading to $100 after the 7% decline yesterday, as the chip trade war heats up.
Quick overview
- Nvidia's stock price is declining, heading towards $100 after an 8% drop yesterday due to escalating chip trade tensions.
- The company faces significant challenges from U.S. trade sanctions, resulting in a $5.5 billion impairment charge linked to unsold AI chips restricted from export to China.
- Analysts warn that Nvidia could experience a revenue hit of $15 billion to $16 billion, jeopardizing its projected annual sales in the data center GPU market.
- Political scrutiny and calls for stricter regulations on AI chip shipments to China are adding to investor concerns, creating a fragile market environment for Nvidia.
The Nvidia stock price is declining again today, heading to $100 after the 7% decline yesterday, as the chip trade war heats up.
Semiconductor Stocks Under Pressure Amid China Trade Fears
The tech-heavy Nasdaq faced another turbulent session, falling over 1% as semiconductor giants dragged the index lower. Among the hardest hit were ASML, down 6% after reporting weaker Chinese demand, and Nvidia (NVDA), which dropped nearly 8% following concerns over similar exposure to geopolitical headwinds.
The pressure on Nvidia intensified after it revealed a $5.5 billion impairment charge linked to unsold H20 AI chips, which are now restricted from export to China due to escalating U.S. trade sanctions.
Nvidia Chart Daily – The 200 SMA Is Broken
The write-down highlights the growing challenge U.S. chipmakers face as Washington clamps down on advanced technology exports to Beijing, threatening once-lucrative revenue streams.
China Risk Looms: $15 Billion Sales Hit Possible
According to JPMorgan analysts, the financial fallout from Nvidia’s inventory charge could be much larger than the headline figure. With the company’s gross margins sitting between 65% and 67%, the real revenue hit may range from $15 billion to $16 billion, potentially wiping out around 9% of Nvidia’s projected $180 billion in annual data center GPU sales.
Nvidia has long leaned on China as a key growth market. The sudden block on high-performance AI chips not only reduces current earnings potential but also threatens longer-term expansion in the region, shaking investor confidence.
Technical Breakdown: NVDA Dips Below 200-Day Average
The selloff also has a technical component. Nvidia’s share price broke decisively below its 200-day simple moving average (SMA) on the daily chart, a key level watched by traders for signs of trend direction. A brief bounce late in the U.S. session yesterday saw NVDA claw back above this line, closing with a doji candlestick—often a signal of potential reversal.
However, that optimism was short-lived. Sellers returned today with renewed momentum, pushing the stock back under the 200 SMA. The decline has temporarily stalled just above the psychologically important $100 level, but investor sentiment remains fragile.
Political Scrutiny Adds to Nvidia Investor Jitters
Further adding to Nvidia’s troubles were remarks from U.S. Senator Elizabeth Warren, who called on the Commerce Department to block additional AI chip shipments to China. Citing national security concerns and potential military applications, the comments raised the specter of even stricter regulatory actions.
This rising political pressure has rattled the broader semiconductor space, where investors are already grappling with supply chain volatility, rising competition, and slowing global demand.
NVDA Share Outlook: Hold, Sell, or Wait for a Rebound?
While Nvidia’s long-term AI narrative remains compelling, short-term headwinds are mounting. With critical technical support under threat and a major revenue gap looming from lost Chinese sales, NVDA stock could remain under pressure in the coming weeks.
For now, the stock teeters at a pivotal juncture—caught between long-term optimism and the weight of near-term uncertainty. Investors will be watching closely to see if Nvidia can stabilize above $100 and reclaim key technical levels, or if further downside lies ahead.
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