Nvidia (NVDA) stock fell on Friday along with other chipmakers after a December jobs report pushed expectations of additional interest rate cuts from the Federal Reserve and ahead of expected restrictions on chip exports from the Biden administration.
Nvidia stock fell 3%, while AMD (AMD) fell 4.8% and PHLX Semiconductor (^SOX) fell more than 2.4%.
When Closed: January 10 at 4:00:01 PM ET
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The Biden administration is rushing to release him New rules limit exports of AI chips used in data centers By certain companies to certain countries, Bloomberg reported on Wednesday — in an attempt to limit the development of artificial intelligence in countries hostile to the United States such as Russia and China.
Up to 40% of Nvidia’s chips end up in China, according to DA Davidson analyst Jill Loria.
China does not have access to advanced chipmaking technology (called EUV lithography), which is essential to the country’s ability to produce AI chips domestically.
“While some restrictions on chip sales already exist, there have been reports of advanced NVIDIA chips arriving in China, likely due to the fact that NVIDIA has limited control over its distributors,” Luria told Yahoo Finance in an email. “If the US requires NVIDIA to take responsibility for where its chips end up being used, this would put a lot of that revenue at risk.”
The restrictions “will hurt the U.S. economy, set America back, and play into the hands of America’s adversaries,” Nvidia’s vice president of global affairs, Ned Finkle, said in a statement shared with Yahoo Finance on Friday.
He added: “The Biden administration’s last-minute policy will be a legacy that will be criticized by American industry and the global community.”
Nvidia’s vocal opposition to Biden’s upcoming export restrictions “makes investors more concerned about the impact of the new rules” on Friday, DA Davidson’s Loria said.
Information Technology and Innovation Foundation, Technology Policy Research Centre He echoed Nvidia’s concerns About the upcoming rules, noting that “setting caps on US exports of AI GPUs will limit market opportunities for US companies while providing an open door for foreign suppliers of AI chips.”
“While the challenge of such advanced chips reaching American competitors through third-party countries is quite real, the proposed framework fails to address the fundamental challenge in a targeted manner, and will have potentially disastrous consequences for America’s digital industry leadership,” said Stephen Ezell. , the foundation’s vice president for global innovation policy.
Nvidia’s decline on Friday comes after a volatile week for the stock as investors digested the company’s announcements during the technology industry’s annual CES trade show. After rising to a record closing price on Monday, the chipmaker’s stock fell more than 6% on Tuesday before continuing its decline through the end of the week.
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