Several AI chip stocks are experiencing significant sell-offs following the announcement of new export restrictions on advanced chips used for artificial intelligence. Nvidia (NASDAQ: NVDA), Taiwan Semiconductor Manufacturing Company (NYSE: TSM), and Micron Technology (NASDAQ: MU) have seen their shares drop by 2.4%, 3.4%, and 4.8%, respectively.
The US government’s decision to limit the export of AI chips to countries including China, Russia, Iran, and North Korea is aimed at maintaining technological advantages for the US and its allies while limiting AI progress for these nations.
Nvidia, which designs high-performance GPUs for AI data centers, faces additional restrictions that expand existing export limitations. Micron Technology’s memory chips are used in some of Nvidia’s most advanced processors, making it vulnerable to a tougher growth environment despite not being specifically included on the ban list. TSMC dominates the market in AI chip manufacturing and has close ties with China, which may exacerbate the risk.
Rising tensions between the US and China pose a significant threat to AI chip investors, potentially creating substantial valuation pressures for these stocks. The impact of the new regulations will be felt 120 days after their initial publication.
Nvidia (NVDA), Micron Technology (MU), and Taiwan Semiconductor Manufacturing Company (TSM) are among the top performers in the AI chip space. Investors should consider the geopolitical risks associated with the US-China dynamic when making investment decisions in these stocks.
Source: https://finance.yahoo.com/news/artificial-intelligence-ai-stocks-today-192829355.html