Nvidia and other US chip stocks fell on Friday after Nvidia’s lackluster earnings report, with Nvidia shares down over 3% and on track to lose 2% for the week. Dell’s third quarter earnings outlook fell below Wall Street’s estimates, while Alibaba is testing a new chip to compete with Nvidia and AMD in China.

Dell accounts for over 2% of Nvidia’s revenue and roughly 1% of Broadcom, 3.6% of AMD, and 3.7% of Micron’s revenue. The PHLX Semiconductor Index dropped over 2.5% on Friday, following Nvidia’s underperforming data center business and uncertainty in China.

China’s pressure on domestic companies not to use Nvidia’s AI chips has led to geopolitical uncertainty. Nvidia is still awaiting clarity on new regulations that may require it to send 15% of revenue from China chip sales to the US government. CEO Jensen Huang highlighted the importance of the Chinese AI market, which he sees as a $50 billion opportunity.

Alibaba’s development of a new chip is seen as a move to hedge bets against geopolitical hurdles affecting Nvidia’s chip exports to China. Chip supply in China is a concern, with Alibaba’s new chip potentially alleviating pressure on its ability to get Nvidia’s chips. Investors are awaiting clarity on the Trump administration’s plans for 100% tariffs on semiconductors.

Read more at Yahoo Finance: Nvidia stock slides 3% amid broader chip sell-off after Dell results, Alibaba competition