Nvidia underwater after China’s Huawei Chip Update
Nvidia fell in after-hours trading Sunday night, after a report surfaced claiming China’s Huawei was testing an advanced artificial intelligence processor
Quick overview
- Nvidia's stock dropped in after-hours trading following reports of Huawei testing a competing AI processor.
- The company faces new restrictions on H100 chip sales in China, raising concerns about potential sales slowdowns.
- Nvidia's valuation surged due to AI chip sales, but investor confidence waned in 2025 as demand for intensive computing decreased.
- Recent tariffs and export limitations imposed by the U.S. have intensified the trade war between the U.S. and China.
Nvidia fell in after-hours trading Sunday night, after a report surfaced claiming China’s Huawei was testing an advanced artificial intelligence processor meant to compete with some of Nvidia’s products.
However, Nvidia recently indicated that it will encounter new restrictions regarding the sale of its H100 chips in China, raising concerns of a possible slowdown in sales within China. The possibility of a domestically produced competing option could further intensify the sales pressure on Nvidia in China, which still accounts for a significant portion of Nvidia’s sales.
Nvidia’s valuation soared over the last two years as the company reaped profits from AI chip sales.
However, this trajectory reversed in 2025 when investors began questioning the strength of demand for AI chips as AI models became less reliant on intensive computing.
The massive tariffs that the two giants have slapped on one another in recent weeks, to 145 percent from 125 percent, have been the main focus of the ongoing trade war between the United States and China.
Donald Trump has, however, recently taken a more technical measure to thwart Beijing’s aspirations: tight limitations on Nvidia’s chip exports to China.
The company was established in 1993 and focuses on producing graphics processing units (GPUs). These chips can instantly complete incredibly complex calculations created to operate video games.
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