Nvidia Stock: Export Restrictions Trigger Billion-Dollar Hit

Nvidia shares plummeted Wednesday, falling as much as 7% in a single trading session as the chip giant faced new headwinds from Washington. The U.S. government has implemented stricter export controls requiring Nvidia to obtain special licenses for selling high-performance AI chips, including the H20 model, to China and other countries. The policy aims to limit Chinese access to advanced AI technology on national security grounds. This regulatory tightening hits Nvidia particularly hard, as the company itself warned of potential financial ramifications reaching up to $5.5 billion in special charges for the first quarter, primarily affecting inventory and purchase commitments for chips that may no longer be marketable under the new restrictions.

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The negative impact extended beyond Nvidia, sending shockwaves through the entire semiconductor sector. AMD shares also dropped approximately 6%, while Micron Technology and Broadcom experienced significant declines as well. Analyst responses have been mixed, with some firms maintaining optimism despite the turbulence, while others like Bank of America have already reduced their price targets for Nvidia stock. The market's "fear barometer" - the volatility index - notably increased as investors processed the implications of these export restrictions on the tech sector's performance.