- Nvidia (NVDA) shares rose $2.36 or 2.17% to $116.53 in midday trading Tuesday, recovering from a nearly 3% morning drop, after an 8.7% decline Monday to $114.06 amid tariff fears and reports of Blackwell AI chips reaching China despite U.S. export controls.
- The WSJ highlighted third-party resellers smuggling chips through Malaysia, contributing to a 13% year-to-date stock decline and a market cap fall to $2.78 trillion, below $3 trillion, as Nvidia lost ground in five of the past six sessions.
- Mizuho analysts noted ongoing export restriction concerns as a key pressure point, with the breach underscoring Nvidia’s challenge in policing its global supply chain while maintaining its AI hardware leadership.
Nvidia (NVDA), a titan in the artificial-intelligence chip market, is experiencing a volatile ride as its stock climbed $2.36, or 2.17%, to $116.53 in midday trading on Tuesday, rebounding from a nearly 3% morning dip. This uptick follows a bruising 8.7% plunge on Monday, which saw shares close at $114.06 – the lowest since mid-September 2024 – driven by tariff fears and unsettling reports of its cutting-edge Blackwell AI chips reaching China despite stringent U.S. export controls. The Wall Street Journal exposed a sophisticated workaround, detailing how third-party resellers, leveraging entities in nearby regions like Malaysia, are smuggling these advanced chips into China, spotlighting the complexities of policing technology flows in a sprawling global supply chain. Nvidia’s market cap, now at $2.78 trillion, has slipped below the $3 trillion threshold, reflecting a 13% decline year-to-date and a pattern of losses, with the stock closing lower in five of the past six trading sessions.
The breach in export controls poses a dual challenge for Nvidia: maintaining compliance with U.S. policy while preserving its dominance in the AI hardware space. The Blackwell chips, pivotal to Nvidia’s leadership, are slipping into China through indirect channels, raising questions about the company’s oversight of its distribution network. Analysts at Mizuho have pinpointed this issue as a core driver of the stock’s slump, alongside broader anxieties over potential new restrictions on AI hardware exports. Malaysia’s role as a smuggling hub amplifies these concerns, as it underscores the difficulty of enforcing sanctions in a world where supply chains crisscross borders with ease. Investors, rattled by Monday’s 8.7% drop to $114.06, are now weighing whether Tuesday’s $2.36 recovery signals resilience or merely a pause in a steeper slide.
Nvidia’s $116.53 midday price encapsulates a market wrestling with these dynamics. The 13% yearly decline and $2.78 trillion valuation reflect not just tariff pressures but also the strategic risks tied to its technology reaching restricted markets. As the leading AI chip maker, Nvidia’s ability to navigate these export challenges will be critical, especially with its Blackwell line at the forefront of innovation. The stock’s seesaw from a nearly 3% morning fall to a 2.17% midday gain suggests a fragile balance, with investor confidence hinging on how Nvidia addresses these persistent headwinds.
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