Nvidia stock drops 9% amid China smuggling reports and trade war
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Nvidia shares plunged 9% on Monday, erasing approximately $250 billion in market capitalization following reports that Chinese traders have been smuggling the company’s high-performance AI chips despite U.S. export restrictions. The Wall Street Journal revealed that buyers in China have circumvented trade controls by acquiring Nvidia’s flagship Blackwell chips through third-party traders in neighboring regions, with delivery times as short as six weeks.
The revelations cast doubt on the effectiveness of U.S. efforts to curb China’s access to cutting-edge AI technology. Washington initially introduced export controls in 2022 to limit China’s ability to train AI models and develop advanced semiconductor capabilities. However, the rise of Chinese AI firms, such as DeepSeek, underscores the growing international competition in the artificial intelligence sector, raising concerns about the enforcement and impact of these restrictions.
Nvidia’s stock has now fallen to a six-month low, trading around $114 per share, despite reporting record-breaking revenue in its most recent earnings release. The stock’s decline is further compounded by escalating trade tensions, with President Donald Trump’s latest tariffs on China triggering retaliatory measures and intensifying uncertainty in global markets.
While Nvidia remains a dominant player in the AI and semiconductor space, its near-term outlook is clouded by geopolitical risks and regulatory challenges. Market participants will be closely watching developments in U.S.-China trade relations, as well as potential policy adjustments, to gauge the stock’s trajectory in the coming months.
The revelations cast doubt on the effectiveness of U.S. efforts to curb China’s access to cutting-edge AI technology. Washington initially introduced export controls in 2022 to limit China’s ability to train AI models and develop advanced semiconductor capabilities. However, the rise of Chinese AI firms, such as DeepSeek, underscores the growing international competition in the artificial intelligence sector, raising concerns about the enforcement and impact of these restrictions.
Nvidia’s stock has now fallen to a six-month low, trading around $114 per share, despite reporting record-breaking revenue in its most recent earnings release. The stock’s decline is further compounded by escalating trade tensions, with President Donald Trump’s latest tariffs on China triggering retaliatory measures and intensifying uncertainty in global markets.
While Nvidia remains a dominant player in the AI and semiconductor space, its near-term outlook is clouded by geopolitical risks and regulatory challenges. Market participants will be closely watching developments in U.S.-China trade relations, as well as potential policy adjustments, to gauge the stock’s trajectory in the coming months.