Although shares of Nvidia (NVDA) have tripled in value so far this year, shares fell more than 10% in the week after it reported fiscal third-quarter earnings.
The chipmaker’s shares were down about 2.3% in Wednesday afternoon trading and down nearly 10.4% over the past five days.
After the company reported record third-quarter profits last week, Nvidia shares fell nearly 3.5% in after-hours trading. The decline continued the next morning, with the stock down about 1%. Despite beating revenue expectations for another quarter in a row, Nvidia has set fiscal fourth-quarter revenue guidance at $37.5 billion, plus or minus 2% – only slightly above what analysts expected.
The stock slide deepened on Monday, when Nvidia shares fell more than 4% after Reuters (TRI) reported that Jay Puri, the company’s executive vice president of Worldwide Field Operations, had met with China’s vice minister of Handel Wang Shouwen in Beijing.
President-elect Donald Trump has pledged to increase tariffs on Chinese imports by 60% or more when he takes office in January, recently adding that he would impose an additional 10% tariff “on all their many products that the United States Entering States of America. until China stops the flow of fentanyl and other drugs into the US.
These proposed tariffs could lead to retaliation from Beijing, with Chinese state media warning on Tuesday that “there are no winners in tariff wars.” China remains a crucial market for Nvidia, accounting for about 17% of the company’s revenue in the year ending January 2024, up from 26% two years earlier due to existing US export restrictions. The company’s latest China-specific chip, the H20, is expected to generate more than $12 billion in sales this year, according to research group SemiAnalysis.
Meanwhile, the outgoing Biden administration is expected to announce new export controls on China as soon as next week, Reuters reported, which could target hundreds of Chinese chip companies. The US has already imposed several trade restrictions to prevent American companies, including Nvidia, from exporting American technology to China.
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