Key Takeaways

Semiconductor stocks sank Wednesday after Nvidia ( NVDA ) and Advanced Micro Devices ( AMD ) warned they would take a hit after the Trump administration moved to curb the chipmakers’ exports to China.

Nvidia and AMD shares tumbled over 6% in early trading, and Broadcom ( AVGO ) shed close to 4%. Other chip stocks were also lower, dragging the PHLX Semiconductor Index ( SOX ) down 4%. (Read Investopedia's live coverage of today's market action here .)

Nvidia said Tuesday it expects to take a $5.5 billion charge in its fiscal 2026 first-quarter results after the Trump administration limited exports of its artificial intelligence chips to China. The chipmaker said it was informed on April 9 that it required an export license "for the indefinite future" to sell its H20 chips to China. The license is meant to reduce the risk that the H20, which is less powerful than Nvidia’s latest chips and had been tailored to meet U.S. export restrictions , ends up in a Chinese supercomputer. Nvidia is expected to report its latest financial results on May 28.

AMD said it expects to face charges of up to $800 million related to the export of its MI308 chip. The new license requirement will also apply to other chip "equivalents," a spokesman for the U.S. Commerce Department said, according to reports.

Read the original article on Investopedia