Nvidia Stock Plunges 5.16% on U.S. Export Policy Shift

On April 16, 2025, Nvidia's stock dropped by 5.16% in pre-market trading, reflecting the ongoing impact of U.S. policy changes on the company's operations and market sentiment.

Nvidia, the world's largest semiconductor company by market capitalization, has been significantly affected by recent U.S. policy changes. On April 15, the company announced that the U.S. government has informed nvidia that its H20 chips, as well as other chips with similar memory and interconnect bandwidth, will require export licenses to be shipped to China and other countries. This policy change is expected to have a substantial impact on Nvidia's supply chain and financial performance.

The H20 chip, designed specifically for the Chinese market, has seen its performance slightly reduced compared to the H100 model. The delay in obtaining the necessary export licenses could disrupt Nvidia's supply to the Chinese market, where demand for AI chips remains high due to the increasing AI investments by global cloud service providers. Additionally, the prices of Nvidia's consumer-level GPUs have also been affected by these policy changes.

Nvidia has warned that its financial report for the first quarter of the 2026 fiscal year, ending on April 27, 2025, will include approximately $55 billion in expenses related to H20 chips. These expenses are associated with inventory, procurement commitments, and related reserves. The company's stock price initially rose by 1.35% on April 15 but fell by more than 6% in after-hours trading, highlighting the market's concern over the potential long-term impact of these policy changes.