Nvidia sinks, chips tumble amid China fears, Trump tariffs
Mar. 03, 2025 4:16 PM ET
By: Chris Ciaccia, SA News Editor
Semiconductor stocks fell sharply on Monday amid worries that companies in China are using workarounds to get the latest offerings from Nvidia (NASDAQ: NVDA) and President Trump's announcement that tariffs will go into effect tomorrow on Canada and Mexico.
Nvidia shares fell more than 8.5%, which resulted in a bear market for shares of Jensen Huang-led company from its January high. Chinese buyers have been ordering Nvidia's latest AI chips, with Blackwell-installed systems being routed through third parties in nearby regions, The Wall Street Journal reported.
Resellers are using entities registered outside of China to buy servers using Nvidia's offerings from companies in Malaysia, Taiwan and Vietnam, the report added, citing vendors in China. Singapore said it would investigate the case.
The U.S. has had export control curbs on most of Nvidia's offerings, save for the H20, amid fears of national security concerns.
Broadcom ( AVGO), AMD ( AMD) and Marvell ( MRVL), which often trade in tandem with Nvidia, also saw steep losses on Monday.
Separately on Monday, Bank of America said the upcoming earnings from Broadcom, Credo ( CRDO) and Marvell could reignite the AI trade.
Taiwan Semiconductor (NYSE: TSM) shares fell slightly more than 4% even as President Trump announced the company would invest $100B in new capital in the U.S. over the next several years. Taiwan Semiconductor, which makes chips for companies like Apple ( AAPL), Nvidia and AMD, has dominated the global foundry market, at the expense of Intel ( INTC). Intel shares closed down more than 4%.
The three major averages — the Dow Jones, Nasdaq and S&P 500 — took another leg down on Monday after President Trump said that 25% tariffs would go into effect on goods originating from Mexico and Canada.
"No room left for Mexico or for Canada," President Trump said when asked a question if there was room for Mexico or Canada to negotiate before the tariffs took effect. "No. The tariffs you know, they're all set. They go into effect tomorrow."
Other semiconductor stocks were also down sharply on Monday, including Microchip (NASDAQ: MCHP), which announced a layoff of nearly 2,000 workers as part of a restructuring. Also seeing heavy losses were Qualcomm ( QCOM), Texas Instruments ( TXN), Analog Devices ( ADI) and Micron Technology ( MU). |
