NVIDIA shares extend losses slightly, down 3.2% premarket after report Huawei plans mass shipment of new AI chip as China seeks NVIDIA alternatives

NVIDIA shares extend losses slightly, down 3.2% premarket after report Huawei plans mass shipment of new AI chip as China seeks NVIDIA alternatives

NVIDIA's (NVDA) stock has extended its losses, falling 3.2% premarket on April 21, 2025, following reports that Huawei plans to mass ship its new AI chip, the Ascend 910B. The move comes as China seeks alternatives to NVIDIA's products amid escalating trade tensions and export restrictions [1].

The latest development adds to the existing pressure on NVIDIA, which has been struggling with a $5.5 billion impairment charge due to unsold AI chips restricted from export to China [1]. The company's stock price has been volatile, dropping from around $150 to below $100 in recent weeks. Analysts warn that the financial fallout from this charge could be much larger, potentially hitting NVIDIA's revenue by $15 billion to $16 billion [1].

China's AI industry is responding to these restrictions by adopting a multi-pronged strategy. First, domestic chip manufacturers are pushing for alternatives, with Huawei's Ascend 910B already in large-scale use by Tencent and Ant Group [2]. Second, consumer-grade graphics cards are being repurposed for data center use, leading to a 40% price spike [2]. Lastly, Chinese companies are establishing computing nodes in regions like Malaysia and Thailand to undertake AI training tasks offshore [2].

NVIDIA's stock price has been closely watched by traders, with the 200-day simple moving average (SMA) being a key technical level. The stock broke decisively below this level, indicating a potential trend reversal, but has since bounced back and forth around the $100 mark [1].

Investors are closely monitoring NVIDIA's ability to stabilize above $100 and reclaim key technical levels, as the company faces significant headwinds in the near term. The broader semiconductor space is also under pressure, with supply chain volatility, rising competition, and slowing global demand adding to the uncertainty [1].

References:
[1] https://www.fxleaders.com/news/2025/04/17/nvidia-stock-slumps-on-15b-loss-risk-time-to-reevaluate-nvda/
[2] https://www.gurufocus.com/news/2785546/nvidias-nvda-h20-chip-export-restrictions-and-chinas-ai-industry-resilience