Shares of Nvidia Corp (NVDA.O) dropped by nearly 5% to a nearly five-month-low on Tuesday following a report that the artificial intelligence (AI) giant may be forced to cancel up to $5 billion worth of advanced chip orders to China in compliance with new U.S. government restrictions.
The logo of NVIDIA as seen at its corporate headquarters in Santa Clara, California, in May of 2022. Courtesy NVIDIA/Handout via REUTERS/File Photodropped by nearly 5% to a nearly five-month-low on Tuesday following a report that the artificial intelligence giant may be forced to cancel up to $5 billion worth of advanced chip orders to China in compliance with new U.S. government restrictions.
"The stock is getting oversold," said Tom Plumb, chief executive and lead portfolio manager at Plumb Funds, which has Nvidia as one of its largest holdings. A Nvidia spokesperson said there is "high demand" for its advanced chips, which often require significant lead time to build, and that it is working to allocate orders to its "wide range of customers" in the U.S. and elsewhere.
The new rules go into effect in November and included export controls to countries including Iran and Russia.
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