Nvidia’s stock fell by more than 5% on Wednesday after a report suggested that Chinese environmental rules could hurt the company’s sales in China. Nvidia is no longer the 2nd most valuable company in the world as it’s Microsoft that holds more value now, the Kobessei Letter said on its X account.
This drop is part of a larger decline in tech stocks, as concerns about a growing trade war keep on rising.The drop happened after the Financial Times reported that Chinese regulators are encouraging companies to use data center chips that meet strict environmental standards. Nvidia’s H20 chip reportedly does not meet these standards, and it’s also tied to the US export controls for the Chinese market.
Nvidia and Tesla Lose $222 Billion in Market Value
Nvidia, which is worth about $170 billion, and Tesla, which is valued at $52 billion, together lost $222 billion in market value, according to Forbes. This loss is more than the total value of General Electric, which is the 35th-largest public company in the US.
Both companies are having fluctuating changes in their stock prices, and they’ve often been among the biggest movers due to Trump’s foreign policies announced in his second term. Wednesday’s situation was no different.
Tesla and Nvidia are both especially impacted by the potential for trade retaliation from other countries, including China, which makes up more than 10% of their revenue.
This report comes amid rising trade tensions between the US and China, especially after the US increased tariffs on Chinese goods when Trump became president. Restrictions on advanced semiconductor technology exports have also added to the tension between the two countries.