Nvidia and ASML Could Extend Losses Today Amid AI Chip Export Uncertainty

Chip Stocks Drive Nasdaq 100 Lower as AI Chip Policy Sparks Fears

On Tuesday, U.S. stock indexes took a hit, with chip stocks leading the decline. The Nasdaq 100 dropped 1.37%, driven largely by the sharp sell-off in semiconductor companies. This weakness could carry over into today’s markets, particularly impacting tech-heavy indexes like the Nasdaq. Chip companies like Nvidia, Broadcom, and Applied Materials were among the hardest hit as investors reacted to concerns over regulatory developments and weakening demand for non-AI chips.

Semiconductor Sell-Off Leads to Heavy Losses

Nine out of the top ten stocks dragging down the Nasdaq 100 were chipmakers. Nvidia led the charge, falling 4.7% and wiping nearly 75 points off the index. Broadcom, down 3.5%, contributed another 37 points, while Applied Materials saw a staggering 10.7% drop.

Other key semiconductor players such as KLA Corp, AMD, and ASML also posted significant losses, reflecting broad sector weakness. The Philadelphia Semiconductor Index dropped nearly 5%, underscoring the widespread sell-off in this critical tech sector.

Regulatory Uncertainty Amplifies Investor Fears

A key factor behind the sell-off was growing uncertainty around U.S. government policy on AI chip exports. According to Bloomberg, officials are considering new limits on sales of advanced AI chips to certain countries, including the Persian Gulf region, citing national security concerns.

This policy follows restrictions already in place on exports to China, and the potential for further limits is spooking investors. Nvidia, a major AI chipmaker, is particularly vulnerable to these changes, given its heavy reliance on international markets.

Weaker Demand for Non-AI Chips Raises Red Flags

While AI chips have surged in demand, non-AI segments of the chip market are struggling. ASML, Europe’s largest chip company, cut its sales forecast due to weaker-than-expected demand for logic and memory chips. This dragged its stock down 16% on Tuesday, adding to broader concerns about the semiconductor sector’s outlook. As chipmakers like Samsung and TSMC continue to grapple with post-pandemic demand stabilization, investors are becoming increasingly cautious.

Short- and Long-Term Implications for Markets

In the short term, the Nasdaq 100 and semiconductor-heavy indexes may remain volatile as regulatory uncertainty and weak non-AI demand linger. Intermediate-term impacts will depend on the U.S. government’s final stance on AI chip export controls, which could limit growth prospects for companies like Nvidia and AMD.

In the long term, continued pressure on chipmakers could reshape the sector, especially as global supply chains evolve. Today’s session could see continued focus on these developments, making chip stocks the story of the day for traders.