Nvidia (NASDAQ: NVDA), Taiwan Semiconductor Manufacturing Company (NYSE: TSM), and Micron (NASDAQ: MU) are seeing broad sell-offs in Monday’s trading, with the three stocks down 2.4%, 3.4%, and 4.8%, respectively, as of 12:45 p.m. ET.
The move is attributed to new regulations announced by US officials that will limit the export of advanced AI chips and semiconductor manufacturing equipment. The restrictions aim to maintain technological advantages for the US and its allies while limiting AI progress for China and other adversarial countries.
Nvidia, a leading designer of high-performance GPUs for AI data centers, will face harder export limitations under the new regulations. Micron, a producer of memory solutions, may not be directly impacted but could still face challenges due to its inclusion in Nvidia’s processors.
TSMC, which dominates the market in advanced AI chip manufacturing, is particularly vulnerable due to its geographical proximity to China and its central role in the US-China dynamic. Rising tensions between the two nations could create substantial valuation pressures for AI chip stocks.
The US-China dynamic is a significant risk factor for AI chip investors, with geopolitical concerns emerging as a key national security and economic issue. TSMC’s dominance in advanced chip fabrication makes it one of the world’s most important companies, and any attempt by China to exert greater control over Taiwan could lead to powerful bearish pressures on AI chip stocks.
The Motley Fool recommends Nvidia and Taiwan Semiconductor Manufacturing Company, but has positions in Micron Technology.
Source: https://eu.usatoday.com/story/money/2025/01/13/ai-stocks-fall-monday-nvidia/77676323007