Nvidia Stock Drops the Most Since April Amid Trump Crackdown on Chipmakers

After flirting above $180 levels for nearly a week, Nvidia stock (NASDAQ: NVDA) crashed 3.5% on Tuesday. The recent fall comes as the Trump administration is seeking equity stakes in chipmaking companies, under the new Chips Act. This led to strong selling pressure in NVDA and other chipmakers trading on Wall Street.

Nvidia Stock Crashes, the First Big Fall After April

The Nvidia stock price has seen a one-sided rally from the April lows of $94, to the all-time highs of $184. As per the technical charts, the stock has closed under the 20-day exponential moving average (EMA) for the first time since April. This suggests that the short-term trend has turned bearish, unless bulls manage a pullback above the trendline.

Crypto analyst Peter DiCarlo cautioned that Nvidia (NVDA) buyers appear to be losing momentum on the weekly chart. He noted that if weekly demand continues to weaken, the stock price could face a potential 20% decline in the coming weeks.

DiCarlo added that he does not plan to short the stock given its overall bullish structure. However, he emphasized that this week’s close will be crucial before making further judgments.

Is Intel’s Loss, Nvidia’s Gain?

Recent reports indicate that the Trump administration has acquired a 10% stake in Intel (INTC), sparking debate over the strategic value of the move. On Tuesday morning, U.S. Commerce Secretary Lutnick expressed optimism, stating he is “hopeful that Intel can make the U.S. a participant in the chip space.”

On the other hand, critics call this investment by the US government misguided, citing Intel’s significant lag in the artificial intelligence (AI) race. While Intel struggles to regain competitiveness, Nvidia (NVDA) now controls as much as 90% of the global AI chip market. This leaves the other market players to compete for a very small share.

Analysts at The Koibeissi Letter suggested that instead of committing $11 billion for a minority stake in Intel, U.S. policymakers should focus on reinforcing Nvidia’s leadership in AI hardware. They also stated that rather than imposing 15% revenue-sharing tax on Nvidia, the U.S. should adopt measures to strengthen Nvidia’s AI advantage over global rivals.

Recently, reports also suggested that company CEO Jensen Huan offloaded $40 million of Nvidia stock holdings last week. This recent sell-off comes as part of the periodic offloading of shares by company executives.

All eyes will be on the Nvidia Q2 earnings scheduled next week on August 27. Any indication of robust earnings could ease the selling pressure from the NVDA stock moving ahead.

A New AI Chip for China, Will Nvidia Stock Jump Again?

Following the robust sales of its H20 chips in China, the largest chipmaker is looking for a product upgrade and the launch of new AI chips. Nvidia is reportedly developing a new product, dubbed B30A, built on its Blackwell chip architecture, according to a Reuters report citing sources familiar with the matter.

The company aims to deliver sample units to Chinese clients for testing as early as next month. In a statement to CNBC, company spokesperson said:

The Trump administration blocked the sale of advanced computer chips to China in April, citing national security concerns. Nvidia developed its China-specific H20 chip following export restrictions on AI chips introduced by the Biden administration in 2023. On the other hand, AMD responded with the MI308 chip for the Chinese market.

Last week, President Donald Trump revealed that he initially sought a 20% cut of Nvidia’s sales, but CEO Jensen Huang negotiated the figure down to 15%