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Semiconductor Stocks Crater as Tariffs Hit NVIDIA Hard

Semiconductor Stocks Crater as Tariffs Hit NVIDIA Hard

Published: by Omor IE

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Key Points

  • Chip stocks are tumbling due to NVIDIA reporting a $5.5 billion hit from tariffs.

  • Most tech stocks have followed suit.

  • Rare earth stocks have gained more due to continuous trade escalations.

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NVIDIA (NASDAQ: NVDA) expects a massive $5.5 billion charge due to tariffs, and analysts see revenue taking a $10 billion-plus hit over the coming quarters due to export restrictions to China. The Trump administration said that H20 chip exports to China a license and would do so indefinitely.

The Magnificent Seven stocks have slumped collectively due to NVIDIA reporting these charges. Other chip companies are expected to report hits too. Commerce officials have also confirmed earlier that separate tariffs on semiconductors are imminent and would directly affect these companies. China has also added restrictions on rare earth mineral exports, so that’s another headache chip-making companies have to deal with. The electronics tariff exemption was welcomed by the market earlier. Unfortunately, the relief rally has turned out to be short-lived so far.

Here’s a market update as of 11:00 A.M (ET) today.

  • The S&P 500 is down 55.72 points, or 1.03%.
  • The Nasdaq Composite is down 355.44 points, or 1.87%.
  • The Dow Jones Industrial Average is down 123.26 points, or 0.31%.
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Semiconductor Stocks Fall

  • NVDA stock has tumbled by 7% as of writing. No surprise here since this is mainly why the broader market has taken a hit. UBS maintained its $185 target and a “Buy” rating, though that hasn’t helped it much.
  • AMD (NASDAQ: AMD) is down 6.4%. This isn’t just because of some spillover bearishness from NVIDIA. The company also flagged an $800 million hit from the recent trade war and the consequent restrictions.
  • KLA Corp (NASDAQ: KLAC) is down 5%.
  • Taiwan Semiconductor (NYSE: TSM) is down 3%. Things may change here rapidly due to an earnings report due soon.
  • Broadcom (NASDAQ: AVGO) is down 2.8%.

Notable Gainers Today

  • NioCorp Developments (NASDAQ: NB) is up 26.6%. It’s a rare earth mineral company, so it’s going up due to Chinese export restrictions causing more interest in domestic rare earth companies.
  • USA Rare Earth (NASDAQ: USAR) is up 25% for the same reason.
  • ProKidney (NASDAQ: PROK) is up 17% due to a big buy triggering a rally here.
  • Webull (NASDAQ: BULL) is up 15% due to massive swings post-IPO.
  • Hertz Global (NASDAQ: HTZ) is up 12.6% due to Ackman Pershing Square disclosing a large stake here.

Notable Losers Today

  • Kingsoft Cloud (NASDAQ: KC) is down 16.4% as it prices public equity offering to raise $260.7 million.
  • Arrowhead Pharmaceuticals (NASDAQ: ARWR) is down 12% due to its CFO Ken Myszkowski retiring and being replaced by Daniel Apel.
  • Interactive Brokers Group (NASDAQ: IBKR) is down 9.8% due to a Q1 earnings miss. The company did announce a dividend hike and a stock split, but this wasn’t enough to offset the bearish sentiment.
  • Red Cat Holdings (NASDAQ: RCAT) is down 9% as it corrects from a parabolic rally last year.
  • J.B. Hunt Transport Services (NASDAQ: JBHT) is down 8.4% as its executives have said that tariffs may hit demand. Barron’s ran a piece saying, “it’s at the heart of the trade war,” and both UBS and BMO cut their price targets.

The image featured at the top of this post is ©wellesenterprises / iStock.

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