Nvidia shares fell after this information appeared
Nvidia shares suffered their worst stock drop in more than two months after US President Joe Biden’s administration restricted the company’s sales of processors designed specifically for the Chinese market, as expected yesterday.
Nvidia has warned that the new rules could hamper product development and cause other difficulties, although the changes are unlikely to cause financial losses in the short term.
Nvidia shares fell 4.7% to $439.38, their biggest one-day drop since Aug. 9. The tighter controls will affect Nvidia’s A800 and H800 chips, which the US firm created for export to China after the Biden administration imposed its initial restrictions last October, a senior US official said.
Authorities have cut sales of Nvidia chips produced specifically for China
“We follow all regulations as we work to create products that support thousands of applications across a broad range of industries,” Nvidia said in a statement. “Given the global demand for our products, we do not expect a material impact on our financial results shortly.”
Morgan Stanley lowered its target price for Nvidia shares due to “draconian” export controls. Shares of Asian companies related to artificial intelligence chips fell after the official US announcement. Shares of Beijing Unisplendour Corp. and Lenovo Group Ltd., which sells data center equipment in China, were down about 10%.
As part of the new rules, the Biden administration added two Chinese artificial intelligence chip startups, Shanghai Biren Intelligent Technology Co., to its list of trade restrictions. and Moore Threads Intelligent Technology Beijing Co. – and their subsidiaries. The US requires companies to obtain a US government license before shipping products to these firms.
Chinese Foreign Ministry spokeswoman Mao Ning said her country opposes this US policy.
After this news appeared, retail prices for Nvidia cards in the Chinese online store JD increased by an average of 10% per day.
