Nvidia, chip stocks drag tech lower as new Biden export rules, jobs report weigh
Published On Jan 10, 2025, 4:01 PM
Nvidia's stock fell by 3% along with other semiconductor companies due to increased concerns about new export restrictions on AI chips from the Biden administration, as well as a better-than-expected jobs report that may affect Federal Reserve interest rate policies. The potential restrictions could jeopardize a significant portion of Nvidia's revenue, especially since 40% of its chips go to China. The overall semiconductor sector, including AMD and the PHLX Semiconductor Index, also saw declines. Analysts are cautious, predicting volatility ahead of Nvidia's earnings report on February 26.
Stock Forecasts
NVDA
Negative
Nvidia's recent decline is largely influenced by the potential restrictions on chip exports, which are set to compound investor fears about reduced revenue from a crucial market. While there may be short-term volatility, Nvidia's strong market position and ongoing demand for AI technology could balance out future declines if the company can pivot successfully.
AMD
Negative
AMD is under pressure not just from market conditions but also due to a downgrade from Goldman Sachs, indicating a lack of confidence in short-term performance as competition intensifies and demand remains uncertain. The downgrade may lead to further negative sentiment among investors.
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