Nvidia Corporation (NVDA), known for making AI chips, saw its stock price fall significantly on Wednesday. This drop came after several pieces of bad news that worried investors. People are concerned that the demand for AI infrastructure may be slowing down, and US trade rules are tightening.
One major reason for the decline was a disappointing forecast from Super Micro Computer (SMCI), a key customer for Nvidia that builds AI servers. Super Micro reduced its revenue and profit expectations for the third quarter.
They mentioned that “delayed customer platform decisions” pushed sales into the next quarter. Additionally, Super Micro has higher inventory reserves of older products, likely due to the shift towards Nvidia’s newer Blackwell chip architecture.
After this warning, Super Micro’s stock fell sharply, pulling Nvidia and other AI-related stocks down as investors feared a slowdown in AI spending.
While some analysts believe Super Micro’s issues may be specific to the company and not a sign of a larger trend, the news increased worries about whether the rapid growth in AI data centers can continue. This warning came at a time when the overall economic data from the US was also weak, contributing to a sell-off in technology stocks.
Further adding to the pressure on Nvidia were new concerns about US trade policy regarding advanced AI chips. Reports indicated that the Trump administration is thinking about changing the “AI-diffusion” rules, a policy from the previous administration that will soon take effect.
These rules are meant to limit the sale of high-end AI chips to many countries besides China, including allies like Israel and India, to stop sensitive technology from being misused.
Major tech companies have been arguing against these rules, worrying they might hinder innovation and international sales. The Trump administration’s strict trade policies, especially with China, and recent actions that effectively banned Nvidia’s China-specific H20 chip suggest these regulations might become stricter.
Analysts think these rules, along with existing export controls on China, could significantly affect Nvidia’s revenue, particularly in countries that were important for its sales last year.
The mix of Super Micro’s warning and uncertainty around future AI chip export rules created big challenges for Nvidia’s stock on Wednesday. This situation shows how customer demand, technology changes, and geopolitical factors all affect the high-stakes AI market.