Chip Stocks Nvidia (NVDA), Broadcom (AVGO) Tumble on Supply Disruptions
Big semiconductor manufacturers such as Nvidia and Broadcom are still particularly sensitive to disruptions in the global supply chain.
Quick overview
- Chip companies like Nvidia and Broadcom are increasingly vulnerable to global supply chain disruptions due to escalating US-China trade tensions.
- Nvidia's stock recently fell to a critical support level, with concerns over a $5.5 billion impairment charge related to unsold AI chips blocked from export to China.
- Broadcom has experienced a significant decline in stock value, facing resistance at key technical levels and closing below the 100-day SMA.
- The semiconductor sector is under pressure from profit-taking, supply bottlenecks, and potential new trade barriers, raising investor unease.
Big semiconductor manufacturers such as Nvidia and Broadcom are still particularly sensitive to disruptions in the global supply chain.
Persistent Trade Tensions Weigh Heavily on Nvidia and Broadcom
Leading chipmakers like Nvidia, AMD, and Broadcom are facing intensifying exposure to global trade uncertainty and supply chain disruptions. As geopolitical strains between the US and China escalate, investor anxiety has fueled a wave of selling pressure, dragging semiconductor stocks toward critical chart levels.
Nvidia Tests Key Technical Support Amid Steep Pullback
Shares of Nvidia (NVDA) recently tested the vital 200-week simple moving average (SMA)—a widely observed technical support zone. Although the stock clawed back above this threshold during a late rebound, it closed the session with a doji candlestick, often seen as a sign of indecision or a potential turning point. Nevertheless, NVDA remains under pressure, down roughly 6.7% over the last week.
Nvidia Weekly Price Chart – On Track for a Retest of Sub-$100 Levels?
The downward momentum in Nvidia was compounded by news of a $5.5 billion write-down linked to inventory of H20 AI chips, which were restricted from export to China under newly expanded U.S. tech controls. The announcement underscores growing threats to revenue streams and mounting inventory risks amid shifting regulatory landscapes.
Broadcom Weekly Chart – Struggling to Break Through Resistance
Broadcom (AVGO) has also suffered steep losses, falling more than 40% since mid-January. Although it bounced off its 100-week SMA, the rebound stalled at the 50-week SMA near $185, marking a strong resistance zone. The stock ended the week sharply lower at $170.99, slipping below the 100-day SMA again—another bearish signal that may cap short-term gains.
Sector Outlook: Semiconductor Stocks Trapped in Crossfire
The outlook for chipmakers remains murky. A mix of profit-taking, ongoing supply chain issues, and increasing political tension is dragging on sentiment across the sector. Once seen as market leaders, semiconductors are now grappling with the implications of export controls and retaliatory trade measures.
Given the sector’s dependence on global demand and tightly integrated supply chains, any escalation in trade barriers could create persistent structural challenges. Market participants will be closely monitoring support levels and trade negotiations, as the next phase in diplomacy—or further deterioration—could dictate the direction of the next major move.
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