Nvidia & AMD Sell-Off vs. Hertz's Rally: Navigating Tech Turbulence and Strategic Gains

The tech sector faced a perfect storm in April 2025, with regulatory pressures and geopolitical tensions driving dramatic stock movements. While Nvidia (NVDA) and AMD (AMD) saw significant sell-offs due to U.S.-China trade conflicts, Hertz (HTZ) surged on institutional investor optimism. This article dissects the forces behind these divergent trends and their implications for investors.

Nvidia: Export Restrictions and Tariffs Trigger a $5.5B Charge

Nvidia’s shares plummeted 7% in early April 2025 following the announcement of a $5.5 billion charge tied to stricter U.S. export restrictions on its H20 AI chips to China. These regulatory hurdles, compounded by retaliatory tariffs, threatened 13% of its revenue from China. The U.S. imposed a 32% tariff on Taiwanese imports and 34% on Chinese goods, while Beijing retaliated with 84% tariffs on U.S. products, though semiconductors were temporarily exempt.

Despite these headwinds, Nvidia’s Blackwell architecture—offering 25x higher token throughput and 20x lower costs than prior models—positions it to dominate AI inference workloads. However, its forward P/E ratio dropped to 24.45x, far below its five-year average of 71.54x, reflecting investor pessimism about near-term growth.

AMD: Trade Wars and $800M Provisions Weigh on Shares

AMD’s stock fell 7.3% as it disclosed an $800 million provision linked to U.S. export restrictions on its MI308 chips to China and D5 nations. Like Nvidia, AMD faces stricter licensing requirements for restricted exports, with licenses not guaranteed. The U.S.-China tariff war escalated further, with Washington imposing 245% tariffs on Chinese goods and Beijing retaliating with 125% tariffs on U.S. imports.

AMD’s decline mirrored broader sector weakness: the Nasdaq Composite fell 3%, and the VanEck Semiconductor ETF (SMH) dropped over 3%, signaling tech’s vulnerability to trade tensions.

Hertz: Bill Ackman’s Stake Sparks a 56% Rally

Hertz’s stock soared 56% on April 17 after billionaire investor Bill Ackman’s Pershing Square disclosed a 20% stake, signaling confidence in the company’s turnaround potential. This contrasted sharply with the broader market’s downturn, as the Nasdaq fell 3% and the S&P 500 dropped 1.75%.

The surge was fueled by two strategic moves:
1. NVIDIA Partnership: Hertz announced AI-driven in-vehicle computing systems using NVIDIA’s DRIVE Hyperion platform, boosting its stock 7.2% in 24 hours.
2. AMD Supply Deal: AMD secured a contract to provide semiconductors for Hertz’s infotainment systems, driving its shares 5.8% higher.

Despite Hertz’s recent gains, its stock remained 11% lower year-to-date amid lingering operational challenges, including a $2.86 billion 2024 net loss and struggles transitioning to electric vehicles.

Broader Market Context: Trade Tensions and Fed Policy

The sell-offs in tech stocks were exacerbated by the Federal Reserve’s hawkish stance. Fed Chair Jerome Powell emphasized inflation control, dampening hopes for rate cuts despite strong retail sales (+1.4% month-over-month). Meanwhile, U.S.-China trade disputes intensified, with gold hitting $3,315/oz and crude oil rising to $62/barrel as safe havens.

Market breadth metrics highlighted systemic weakness:
- 32.3% of stocks advanced, while 65.7% declined.
- Major ETFs (SPY, QQQ, IWM) faced short-term downtrends, with support levels at $500, $415, and $170, respectively.

Conclusion: Navigating the Tech Crossroads

The April 2025 market dynamics underscored a stark divide:
- Nvidia and AMD face near-term headwinds from trade wars and regulatory risks, but their long-term dominance in AI infrastructure (e.g., CUDA ecosystem, Blackwell architecture) offers growth potential.
- Hertz’s surge reflects institutional optimism, though its recovery hinges on operational improvements and sustaining partnerships with tech leaders.

Investors should consider:
1. Nvidia: A 24.45x forward P/E suggests risks are priced in. Monitor tariff de-escalation and AI adoption trends.
2. AMD: The $800M provision highlights sector-wide risks, but its Ryzen/Radeon chipsets remain critical to Hertz’s tech overhaul.
3. Hertz: While Ackman’s stake signals confidence, the stock’s $1.50 gap below its post-bankruptcy peak underscores unresolved challenges.

The broader market’s bearish tilt (with only 20% of stocks above 20-day moving averages) suggests caution. Yet, tech’s AI-driven future—exemplified by NVIDIA’s 25x throughput gains—remains a compelling long-term narrative. For now, the path forward depends on geopolitical détente and corporate execution.

Data as of April 2025. Past performance does not guarantee future results.