Why $NVDA & $AMD Lagged in Recent Trading

1. U.S. Export Restrictions on AI Chips to China

Trigger: On April 15–16, 2025 , the U.S. Commerce Department announced new licensing requirements for exports of NVIDIA’s H20 and AMD’s MI308 AI chips to China. This escalated existing trade war tensions and directly targeted semiconductor leaders with significant exposure to China’s AI market.

Impact:

NVIDIA: Warned of a $5.5 billion charge related to inventory write-downs and lost sales. Shares fell 6.14% to $105.31 on April 16.

AMD: Faced potential losses of $800 million , contributing to its stock decline.

2. Geopolitical Uncertainty & Sector-Wide Selloff

The restrictions signal heightened geopolitical risks under the Trump administration’s "America First" trade policies , which prioritize curbing China’s access to advanced AI technology.

Broader sector impact: The S&P 500 Information Technology sector declined 1.8% during the holiday-shortened week (April 14–17), underperforming mid- and small-cap indexes.

3. Short-Term Financial and Sentimental Pressures

Short activity surged:

NVDA: Short volume spiked to 39.73M shares on April 16 (10.01% of total volume).

AMD: Short volume reached 8.39M shares (13.5% of total volume) on the same day.

Analyst sentiment:

NVIDIA’s mean target price is $167.73 (23 "Buy" ratings), but near-term risks dominate.

AMD has a mean target of $142.75 , with mixed analyst ratings (24 "Buy" vs. 18 "Hold").

Market Implications

Sector risk:

Semiconductor stocks face renewed volatility due to trade policy unpredictability.

Long-term outlook :

Both companies are critical to AI infrastructure, but diversification away from China may take quarters. NVIDIA’s $5.5B charge highlights acute supply-chain vulnerability.