Nvidia stock drops 5% due to Chinese environmental regulations, part of tech selloff

From Yahoo Finance: 2025-03-26 13:03:00

Nvidia stock dropped over 5% on concerns about Chinese environmental regulations affecting sales. The tech selloff came amidst trade war fears. Chinese regulators favor data center chips meeting strict environmental guidelines, excluding Nvidia’s H20 chip, designed for US export controls in China. The tension adds to US-China trade disputes over advanced semiconductor technology.

Microsoft canceled new data center projects in the US and Europe, sparking investor concerns about Big Tech’s AI spending. TD Cowen analysts noted Google and Meta stepping in to fill Microsoft’s void in international and US markets. This move follows Microsoft’s cancellation of unspecified data center leases in February.

Nvidia’s decline led tech stocks lower, halting a recent sector rebound. The S&P 500 and Nasdaq entered correction territory earlier this month. Tech stocks have been hit hard by trade policies under the Trump administration, spurring market sell-offs. Concerns about the impact of tariffs on the economy loom large.

Fears of overvaluation in the AI trade shook Nvidia in late January when Chinese startup DeepSeek launched a chatbot with fewer resources than US competitors. More recently, Marvell Technology’s revenue outlook disappointed investors, leading to a drop in semiconductor stocks. The AI trade faces renewed concerns about being overextended.

Read more: Nvidia stock sinks 5% amid tech rout, report on China environmental guidelines