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Nvidia Corporation (NVDA) experienced a notable decline of -2.96%, with shares trading at $135.96 as of Friday afternoon. This follows a broader pullback in chipmaker stocks, including AMD, which saw a drop of over 5%, and the PHLX Semiconductor index, which fell by more than 2.5%.
The decline is attributed to two major factors: a strong December jobs report and the announcement of new export restrictions from the Biden administration. The U.S. jobs report for December surpassed expectations, pushing out investor hopes for additional rate cuts from the Federal Reserve.
At the same time, news of the Biden administration’s plan to impose export restrictions on advanced AI chips, including those produced by Nvidia, has raised concerns. Nvidia, which derives a significant portion of its revenue from China, faces risks from these potential restrictions, as up to 40% of its chips are sold to the country. If the new rules take effect, they could significantly impact Nvidia’s revenue from foreign sales, especially as China has limited access to essential chipmaking technology.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice.