Chipmaker Stocks Slide as Nvidia Faces $5.5B Charge Amid New US Export Restrictions

Chipmaker Stocks Slide as Nvidia Faces $5.5B Charge Amid New US Export Restrictions

Shares of semiconductor giants Nvidia and AMD plunged in after-hours trading on April 15, after Nvidia disclosed it expects to incur a $5.5 billion charge due to tightened U.S. export restrictions on its artificial intelligence (AI) chips bound for China.

In a regulatory filing, Nvidia revealed that the U.S. government informed the company on April 9 that its advanced H20 AI chips and any products with similar bandwidth capabilities now require export licenses to be shipped to China, Hong Kong, and Macau.

$5.5 Billion Charge to Hit Q1 Earnings

Nvidia stated that the new controls will significantly impact its inventory and future sales in the Chinese market. The company’s first-quarter results, expected later this month, will include "up to approximately $5.5 billion of charges associated with H20 products for inventory, purchase commitments, and related reserves."

The restrictions come amid growing concerns in Washington that advanced chips may be diverted for military or supercomputing purposes in China. The H20 chip, the most powerful AI processor Nvidia was previously allowed to export to China, is reportedly used in training models developed by Chinese AI firms, such as DeepSeek.

NVDA price tanks in after-hours trading. Source: Google Finance

US-China Chip Tensions Escalate

The Biden administration has continued to escalate chip-related trade controls, aiming to curb China’s access to high-performance AI technologies. Interestingly, earlier this month, the Trump administration had considered delaying the restrictions following a meeting between former President Donald Trump and Nvidia CEO Jensen Huang, NPR reported.

In a separate announcement on April 14, Nvidia said it would invest hundreds of millions of dollars over the next four years to manufacture certain AI chips domestically in the U.S. However, the announcement did little to calm investor nerves.

"Truly no company is safe from tariffs," financial commentary outlet The Kobeissi Letter noted, pointing to the broader implications of an intensifying trade war.

Market Reaction: Nvidia and AMD Take a Hit

Following the announcement, Nvidia (NVDA) shares fell 6% to $105 in after-hours trading, according to Google Finance. The stock is now down 22% year-to-date, reflecting broader market concerns over rising geopolitical tensions and regulatory uncertainty.

Rival chipmaker Advanced Micro Devices (AMD) also took a hit, with shares sliding over 7% to $88.55 after hours. AMD stock has declined more than 25% since January 1.

Both companies have been caught in the crossfire of escalating U.S.-China tech tensions, with increasing restrictions potentially reshaping the global chip supply chain and market dynamics.

What’s Next?

Nvidia’s first quarter of fiscal year 2026 closes on April 27, and investors will be closely watching its earnings report for further guidance on how deeply the new restrictions will affect future revenues. As the U.S. continues to clamp down on critical chip exports, more volatility could be in store for the semiconductor industry.