PANW, AVGO, FTNT, CHKP Stocks Decline Pre-Market As China Reportedly Bans Cybersecurity Software From US, Israeli Firms

• China’s ban on U.S. and Israeli cybersecurity firms comes amid growing tensions between the world’s top two economies.
• The Xi Jinping-led administration has asked domestic companies to halt orders for Nvidia GPUs on multiple occasions.
• On Tuesday, a report stated that China has restricted Nvidia chip purchases to “special circumstances.”

The Chinese government has reportedly banned nearly a dozen U.S. and Israeli software firms, citing national security concerns.

According to a Reuters report citing sources familiar with the matter, Chinese authorities have instructed domestic companies not to use cybersecurity software from the banned companies. It’s not yet clear how many Chinese companies have received the notice.

Among those impacted are Palo Alto Networks Inc. (PANW), Broadcom Inc.’s (AVGO) VMware, Fortinet Inc. (FTNT), and Check Point Software Technologies Ltd. (CHKP), the report stated.

Shares of Palo Alto Networks and Fortinet were down by nearly 3% each in Wednesday’s pre-market trade, while Check Point shares declined 1%. Broadcom shares were down nearly 0.4% at the time of writing.

Retail sentiment on Stocktwits around Palo Alto Networks and Broadcom was in the ‘bearish’ territory, while users were ‘neutral’ on Fortinet and Check Point at the time of writing.

Growing Tensions Between China And US

China’s ban on U.S. and Israeli cybersecurity firms comes amid growing tensions between the world’s top two economies.

The Xi Jinping-led administration has asked domestic companies to halt orders for Nvidia Corp.’s (NVDA) graphics processing units (GPUs) on multiple occasions, as the U.S. and China continue to tussle amid an ongoing trade war triggered by President Donald Trump’s tariff policies.

"China is committed to basing its national development on its own strengths, and is also willing to maintain dialogue and cooperation with all parties to safeguard the stability of global industrial and supply chains," said Liu Pengyu, a spokesperson for the Chinese Embassy in the U.S., according to a Reuters report citing The Information.

Ramping Up Restrictions On Nvidia Chips

On Tuesday, a subsequent report by The Information stated that China has restricted Nvidia chip purchases to “special circumstances.”

China is also escalating its clampdown on Nvidia chip purchases, with a Reuters report on Wednesday stating that the country’s customs agents have been informed that Nvidia’s H200 chip purchases are not permitted for entry.

PANW stock is up 4% year-to-date, AVGO stock is up 2%, FTNT stock is down 1%, while CHKP stock is up 0.5%.

Also See: CPI Report: Annual Inflation Rate Comes In At 2.7% In December, In Line With Expectations

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