By Adam Clark

Nvidia stock slumped Monday as investors continued to find excuses to unload shares of the once-highflying AI company.

Nvidia shares closed down 8.7% at $114.06, the lowest close since Sept. 18, when it closed at $113.3. The stock rose 4% on Friday.

Mizuho's Daniel O'Regan offered up five reasons for the slump: tougher China restrictions; an investigation in Singapore into whether "servers shipped to Malaysia contained Nvidia chips barred from China"; a Trendforce story suggesting orders might be getting canceled as companies await upgraded products; last week's earnings; and no catalysts until GTC starts on March 17.

Let's start with earnings. Nvidia's stock is still down from the company's earnings report last week, despite beating expectations for revenue growth. The stock fell after President Donald Trump announced that tariffs on Canada and Mexico, along with an additional tariff on China, would take effect on Tuesday.

Part of the issue for Nvidia is likely to be continued concerns about potential restrictions on exports of its AI hardware amid reports that advanced chips are reaching China despite U.S. sanctions.

Some Chinese sellers are promising delivery of Nvidia's current-generation Blackwell chips within six weeks, with orders routed via companies in places such as Malaysia, Vietnam and Taiwan, The Wall Street Journal reported on Sunday.

Nvidia's sales in Singapore have become a particular focus for some lawmakers who have pushed for tighter export controls. The country's authorities recently charged three men in a fraud case, alleging that they misrepresented their purpose in buying servers that may have contained Nvidia chips, in potential breach of U.S. export controls, according to a Singaporean government announcement on Monday.

Nvidia declined to comment. The company told The Wall Street Journal that it would investigate every report of possible diversion and take appropriate action.

Meanwhile, Nvidia and its AI chip peer Broadcom are testing Intel's newest chip-manufacturing process, according to a Reuters report. For both companies, Intel could represent another option for manufacturing processors apart from Taiwan Semiconductor Manufacturing.

Broadcom stock was down 6.1%, while Intel was off 4.2%, and Taiwan Semi was down 4.2%.

Write to Adam Clark at adam.clark@barrons.com

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March 03, 2025 16:14 ET (21:14 GMT)

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