Nvidia’s stock is now down nearly 20% from its record high close of $493.55 reached on Aug. 31
dropped by nearly 5% to a nearly five-month-low on Tuesday following a report that the artificial intelligence giant may be forced to cancel up to $5 billion worth of advanced chip orders to China in compliance with new U.S. government restrictions.that AI chip orders scheduled for delivery next year to major Chinese technology companies, including Alibaba Group, TikTok owner-ByteDance and Baidu, are subject to the latest export restrictions announced by the U.S.
“The stock is getting oversold,” said Tom Plumb, chief executive and lead portfolio manager at Plumb Funds, which has Nvidia as one of its largest holdings. A Nvidia spokesperson said there is “high demand” for its advanced chips, which often require significant lead time to build, and that it is working to allocate orders to its “wide range of customers” in the U.S. and elsewhere.
Earlier this month, the Biden administration imposed export restrictions on shipments of more AI chips designed by Nvidia and others to China, a move designed to stop Beijing from receiving cutting-edge U.S. technologies to strengthen its military.