Nvidia, AMD Stocks Take A Hit On Report Of AI Chip Export Caps: Is Retail Worried?

Shares of Nvidia Corp. (NVDA) and Advanced Micro Devices, Inc. (AMD) fell more than 4% on Tuesday  after a report surfaced that U.S. officials are considering capping AI chip exports to certain countries.

According to Bloomberg, the deliberations are in early stages and focus on limiting sales to Persian Gulf nations, where demand for data centers is rising.

Both stocks were trending in the top 10 on Stocktwits by 11:45 a.m. ET. Retail sentiment remained ‘bullish’ for Nvidia but stayed ‘bearish’ for AMD.

Some watchers suggested buying the dips on both companies.

Meanwhile, some bearish traders expressed confidence in shorting both stocks.

This isn’t the first time the U.S. government has imposed restrictions on AI chip exports. Earlier this year, officials reportedly slowed down licenses for companies like Nvidia and AMD to ship high-performance AI chips to the Middle East.

Existing restrictions already cover over 40 countries in the Middle East, Africa, and Asia.

Nvidia previously redesigned its AI chips to comply with U.S. rules targeting China, but how the company might adapt to new potential export caps is unclear.

Nvidia’s new Blackwell AI chip has “insane” demand, according to CEO Jensen Huang.

The company dominates the market for AI training chips, while AMD is catching up in the training space but holds a greater opportunity in AI inference chips.

Last week, AMD’s CEO Lisa Su unveiled a new roadmap for AI chips at the firm’s keynote, but it didn’t generate much buzz as analysts expected more announcements of customer wins.

Nvidia remains a giant in the semiconductor world with a market cap of $3.39 trillion, making it the second most valuable company after Apple. AMD, by comparison, has a market cap of under $270 billion.

Year to date, Nvidia is up more than 170%, while AMD has risen just over 13%.

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