Nvidia Stock Drops: Trump Export Rules and Blackwell Delays Weigh Heavy

Nvidia's stock has taken a hit ahead of its earnings report, with investors grappling with potential Trump export rules and Blackwell delays. The company's shares have fallen by around 5% in recent days, reflecting concerns about the impact of these factors on Nvidia's revenue growth and earnings. In this article, we will delve into the potential implications of these challenges and explore how Nvidia's competitors, such as AMD and Intel, might capitalize on these opportunities.

Potential Trump Export Rules

The outgoing U.S. government has proposed new export rules that could significantly impact Nvidia's global sales and market share. The regulations aim to tighten oversight of AI diffusion and prevent unauthorized use of cutting-edge technologies by adversaries like China and Russia. Virtually all Nvidia GPUs, including DGX, HGX, and MGX systems, as well as A100, A800, H100, H200, H800, B100, B200, GB200, L4, L40S, and RTX 6000 Ada GPUs, would fall under the new rules. The proposed regulations divide countries into three tiers based on trust and risk levels, with Tier 1 countries facing minimal restrictions, Tier 3 countries effectively barred from receiving advanced U.S. AI GPUs, and Tier 2 countries facing restrictions.

If enacted, these rules could lead to a decrease in Nvidia's sales in Tier 2 and Tier 3 countries, as large-scale AI developers may face delays in acquiring GPUs due to the licensing process. This could give U.S.-based companies like Google, Microsoft, and OpenAI an advantage, as they will have fewer real rivals from Tier 2 countries. For Nvidia, which currently sells everything it makes, the limitations may not immediately negatively affect its sales. However, as the market for AI hardware develops and processing capability requirements increase, the licensing requirements will likely impact its sales.

Blackwell Delays

Nvidia's Blackwell generation of GPUs is expected to drive significant revenue growth, potentially exceeding the combined revenue of 2023 and 2024. However, delays in the ramp-up of Blackwell GB200s could lead to a potential revenue shortfall in the short term, affecting Nvidia's stock price and earnings. Key suppliers are providing mixed guidance on the timing of Nvidia's Blackwell GB200 systems, suggesting that the ramp-up might not be as strong as initially expected. This could lead to slower sequential growth for Q1 and a shift in focus towards the second half of the year.

Competitors Capitalizing on Opportunities

Nvidia's competitors, such as AMD and Intel, could capitalize on potential export restrictions and Blackwell delays to gain market share. AMD's Instinct GPUs and Intel's Ponte Vecchio GPUs could see increased demand from customers in Tier 2 and Tier 3 countries, where Nvidia's GPUs may be restricted. AMD and Intel could also target customers in the data center and AI markets, where Nvidia's GPUs may face delays or restrictions. Additionally, AMD and Intel's gaming GPUs could benefit from any delays or restrictions on Nvidia's Blackwell GPUs, as gamers and enthusiasts may turn to AMD and Intel's offerings if Nvidia's GPUs are not readily available or face export restrictions.



In conclusion, Nvidia's stock has dropped ahead of earnings as investors weigh potential Trump export rules and Blackwell delays. These challenges could have a significant impact on Nvidia's revenue growth and earnings in both the short and long term. However, Nvidia's competitors, such as AMD and Intel, could capitalize on these opportunities to gain market share in the AI, data center, and gaming markets. Investors should closely monitor the situation and consider the potential implications for Nvidia's stock price and earnings.