NVIDIA (NVDA) stock fell more than 5% on Wednesday as it was suggested that China’s environmental rules could affect AI giant sales in China. This decline came amid a wider sales of high-tech stocks, fearing the escalation of the trade war.
Nvidia shares will sink later Financial Times Reported Chinese regulators encourage businesses to use data center chips that meet strict environmental requirements. The guidelines exclude Nvidia’s H20 chips, which are compatible with US export controls for the Chinese market.
1:14:09 PM EDT. Market open.
In response to the report, an Nvidia spokesperson said, “Our products provide superior energy efficiency and value in all the markets we serve. As technology moves rapidly, we need to adjust our export control policies to ensure that US companies can achieve their national security goals of management while providing the most energy efficient products possible.”
The report comes amid growing trade tensions between Washington and Beijing after the US has imposed additional tariffs on Chinese goods since President Donald Trump took office. The export curbs of advanced semiconductor technology were also a painful point between the two countries.
Also on Wednesday, analysts at TD Cowen said Microsoft (MSFT) had cancelled new data center projects in the US and Europe.
However, analysts say, “As a proactive basis for third-party data center operators, our checks refer to Google (GOOG), which has stepped into the backfill capabilities Microsoft has been walking on the international market.
The analysis follows a note from TD Cowen in February, when Microsoft recently canceled an unspecified number of data center leases.
Nvidia fell below the “magnificent 7” stock on Wednesday, cutting back recent sector rebounds after the S&P 500 (^GSPC) and Nasdaq (^ixic) entered the corrections territory earlier this month.
Tech stocks are leading to wider market divestments this year as investors weigh the impact of the Trump administration’s tariff policies on the economy.
read more: How does Nvidia make money?
The fear of overvaluing AI trade was sent out in late January that Nvidia fell after Chinese startup Deepseek launched a chatbot with fewer resources than its US rivals.
A new horror of over-expanded AI trade emerged earlier this month after Chipmaker Marvell Technology (MRVL) earnings outlook failed to impress investors, and semiconductor stocks fell.
