Title: Nvidia Stock Tumbles Below $190 Following US Ban on AI Chip Sales to China; Market Cap Slips Under $4.8 Trillion
Original Author: Skerdian Meta | Source: FXLeaders.com
Nvidia, a leading force in the global semiconductor industry and a dominant player in the artificial intelligence (AI) market, experienced a significant stock price drop on November 9, 2025. Shares of the tech giant fell below the critical $190 threshold, following a new restriction imposed by the U.S. government that prohibits the sale of high-end AI chips to China.
In response to the announcement, Nvidia’s stock plunged sharply in early trading, triggering alarm among investors concerned about the ramifications for the company’s revenue streams and future growth prospects. The stock’s decline caused Nvidia’s market capitalization to slide under the $4.8 trillion mark, signaling the market’s negative sentiment in light of regulatory challenges.
This development marks a substantial pivot in what has been an impressive trajectory for Nvidia, once seen as a key beneficiary of the AI boom. The latest trade policy by the U.S. adds further pressure on the broader semiconductor industry and highlights the deepening tech tensions between Washington and Beijing.
Why the Stock Dropped
The drastic fall in Nvidia’s share price is directly linked to an announcement made by the U.S. Department of Commerce that tightens existing export controls, effectively banning the sale of advanced AI chips and semiconductor-related technologies to China. This new measure, designed to limit China’s access to U.S.-origin AI technologies, immediately disrupted markets and triggered risk aversion among tech investors.
Key takeaways from the U.S. policy update include:
– A ban on exports of high-performance AI chips designed or manufactured in the U.S. to Chinese entities.
– A prohibition on technical services and support for existing AI servers and data center infrastructure that run on U.S.-developed chips.
– Enhanced licensing requirements for companies seeking to supply AI technology to China.
– Requirements for U.S.-based chipmakers to pre-notify the government regarding sales and collaborations with Chinese firms involving advanced GPU technologies.
Nvidia, which generates billions in revenue from AI chips, has already faced scrutiny for its significant business relations in China. These new regulations will likely intensify those pressures, as China accounts for a noteworthy share of Nvidia’s AI chip sales.
Impact on Nvidia’s Business Operations
– Nvidia’s revenue from AI chip sales to China has historically represented a considerable part of its total income from the data center segment.
– The U.S. government restrictions will directly impact the sale of key chips such as the H100 and A100, widely deployed in AI model training and inference tasks.
– The company had previously adjusted chip designs (like the A800 and H800) to comply with earlier restrictions. However, under the newly updated rules, even those products are now prohibited.
– Diminished access to the Chinese market could hinder Nvidia’s global supply chain dynamics and reduce economies of scale in its AI segment.
Market Reaction and Share Price Analysis
At the market open on November 9, Nvidia’s stock showed immediate weakness. The sell-off was steep and accelerated as more details came to light about the extent of U.S. restrictions.
– Nvidia shares fell over 6 percent in early trading sessions.
– The stock dropped below the critical $190 level, a point seen by analysts as vital technical support that had held intact during prior market corrections.
– Market capitalization dipped beneath $4.8 trillion, pulling the company further from its all-time high valuation amid the AI rally earlier this year.
This price movement marks a sharp reversal from the bullish momentum Nvidia had enjoyed, fueled by surging demand for generative AI services and large language models (LLMs) powered largely by its GPU architectures.
Sector-Wide Implications
– The broader semiconductor sector also saw a sell-off, with rival firms such as AMD and Intel posting losses for the day.
– AI-focused exchange-traded funds (
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