TLDR
- Nvidia stock dropped 2.8% during Tuesday trading and another 0.6% in after-hours, pulled down by broader AI sector weakness
- AMD reported Q1 China revenue forecast of just $100 million, calling the situation “very dynamic” and not projecting additional sales
- Nvidia awaits U.S. government approval for potential $30 billion H200 chip sales to China, with a 25% cut going to Washington
- AMD beat Q4 earnings expectations with $1.53 EPS on $10.3 billion revenue but stock still fell 6.98% in pre-market trading
- Data center revenue remains strong for AMD at $5.4 billion, beating expectations, while memory shortage concerns loom over PC segments
Nvidia shares took a hit on Tuesday as the AI chip sector faced headwinds. The stock declined 2.8% during regular trading hours.
An additional 0.6% drop came in after-hours trading. The decline happened despite Nvidia’s position as the leading AI chip provider.
Recent market action shows AI stocks acting as a drag rather than a boost. Threats from new AI tools have particularly hurt software and legal-services companies.
But chip makers aren’t seeing a corresponding benefit. Investors appear to be waiting for new catalysts before jumping back in.
China Sales Create Major Question Mark
One potential catalyst involves chip sales to China. However, uncertainty around these deals is causing problems for the entire sector.
AMD’s earnings call on Tuesday highlighted the foggy outlook. CEO Lisa Su told analysts the company saw some Chinese revenue in Q4.
For Q1, AMD is forecasting only $100 million in China revenue. “We are not forecasting any additional revenue from China just because it’s a very dynamic situation,” Su explained.
The comments underscore how unpredictable the Chinese market has become. This affects Nvidia just as much as its competitors.
Nvidia’s own China sales remain in limbo. The Financial Times reported Wednesday that final approval from Washington is still pending following a national security review.
Earlier reports indicated Beijing authorized Chinese firms including Alibaba to prepare orders for Nvidia’s H200 chips. The potential deal size is massive.
Chinese companies would be willing to purchase around 1.5 million H200 chips. That represents roughly $30 billion in revenue, according to KeyBanc analyst John Vinh.
Nvidia has agreed to pass 25% of those sales to the U.S. government. But the entire deal hinges on Washington’s approval.
AMD Results Show Mixed Signals
AMD’s Q4 earnings beat expectations on both the top and bottom lines. The company reported earnings per share of $1.53 on revenue of $10.3 billion.
Wall Street had expected EPS of $1.32 on revenue of $9.6 billion. The company also provided a better-than-anticipated Q1 outlook.
Despite the beat, AMD stock fell hard. Pre-market trading showed a 6.98% decline.
Data center revenue came in strong at $5.4 billion, topping expectations of $4.97 billion. This segment remains the growth engine for AI chip makers.
AMD’s client business revenue hit $3.1 billion versus an anticipated $2.9 billion. Gaming revenue came in slightly below expectations at $843 million.
The global memory shortage is creating new challenges. This could force PC makers to raise prices and hurt demand in AMD’s PC and gaming segments.
AMD recently showcased new products at CES 2026 in Las Vegas. These include the Helios rack-scale server, which CEO Lisa Su called the world’s best AI rack.
The company also provided details about its MI500 series GPUs. AMD claims these offer up to a 1,000x increase in AI performance versus older MI300X chips.
Su believes the AI data center market will reach $1 trillion by 2030. Both AMD and Nvidia face growing competition from customers like Google, Amazon, and Microsoft developing their own custom chips.
Over the past 12 months, AMD stock has climbed 112% while Nvidia has risen 54%. Concerns about an AI bubble and overspending continue to create volatility in the sector.
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