Global | Nitin Sindhu VY
Nvidia, one of the biggest chipmakers in the world, just lost $148 billion in market value in a single day. The reason? New U.S. export bans on its AI chips to China.
This sudden drop shocked investors and dragged down other chip companies like AMD and ASML. Here’s what caused the crash and what it means for Nvidia’s future.
Why Did Nvidia’s Stock Crash?
The U.S. government blocked Nvidia from selling its H20 AI processor to China. This chip is crucial for AI development, data centers, and supercomputers.
- China makes up 13% of Nvidia’s revenue ($17 billion last year).
- The H20 chip alone brought in $12 billion in sales.
- Without China, Nvidia loses a huge chunk of its business.
As a result, Nvidia’s stock dropped nearly 7% overnight, wiping out $148 billion in value.
Why Is China So Important for Nvidia?
China is the world’s second-largest economy and a huge buyer of AI chips. Nvidia relies on China for:
✔ 13% of total revenue ($17 billion/year)
✔ $12 billion from H20 AI chips alone
✔ Future growth in AI and cloud computing
Losing China means Nvidia must find new markets or risk slower growth.
Will Nvidia Recover?
Short-term pain, but long-term hope.
🔴 Bad News:
- Losing China is a major financial hit.
- More U.S. export bans could come.
🟢 Good News:
- Nvidia is still the leader in AI chips.
- Demand for AI is growing globally (U.S., Europe, India).
- Nvidia plans to invest $500 billion in U.S. AI infrastructure.
Final Thoughts
Nvidia’s crash shows how political decisions can shake the stock market. While the company faces challenges now, its strong position in AI could help it bounce back.
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