Chip Stocks Tumble As Biden Reportedly Plans Final Round Of Export Curbs: Retail Divided

Shares of Nvidia Corp. (NVDA), Broadcom Inc. (AVGO), and Advanced Micro Devices Inc. (AMD) slumped on Friday following a Bloomberg report that President Joe Biden’s administration plans to introduce one final round of sweeping chip export restrictions before the end of his term.

Nvidia fell over 4%, Broadcom slipped 3%, and AMD dropped more than 5% in pre-market trading

The proposed regulations aim to control the global spread of artificial intelligence (AI) technology by categorizing countries into three tiers of access. 

U.S. allies would retain broad access to American semiconductor technology, adversaries like China and Russia would face near-total bans, and most other nations would encounter limits on computing power imports. 

The proposed rules also address AI software exports, including restrictions on "model weights," the numerical parameters essential for machine learning algorithms.

The new rules could be finalized by Friday itself, according to anonymous sources cited by Bloomberg.

Nvidia and the Semiconductor Industry Association (SIA) have criticized the plan. 

Nvidia warned the policy would hinder economic growth and U.S. technological leadership. “A last-minute rule restricting exports to most of the world would not reduce the risk of misuse but would threaten economic growth and U.S. leadership,” the company said in a statement. 

The SIA echoed these concerns, arguing that a rushed policy change during a presidential transition risks missteps. “Our country needs to get this right so we can compete and win globally,” the association said.

Nvidia Corp. Sentiment and Message Volume on Jan.10 as of 10:25 a.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment around Nvidia improved to ‘neutral’ from ‘bearish’ a day ago as the company announced Blueprint for AI retail shopping assistants.

Moreover, analysts at Oppenheimer maintained their ‘Outperform’ rating on Nvidia, citing its strong positioning in the AI market despite recent regulatory concerns. 

Nvidia’s stock remains up 153% over the past year.

Broadcom Inc. Sentiment and Message Volume on Jan.10 as of 10:30 a.m. ET | Source: Stocktwits

Retail sentiment around Broadcom also improved to ‘neutral’ from ‘bearish’ a day ago, while message volume remained ‘low’. 

The bearish sentiment was thwarted by reports that Broadcom will reportedly be acquiring 2-nanometer (nm) chip samples from Japan’s Rapidus in June, according to Nikkei Asia. 

Broadcom’s stock has more than doubled in value over the past year. 

Advanced Micro Devices Inc. Sentiment and Message Volume on Jan.10 as of 10:30 a.m. ET | Source: Stocktwits

Retail sentiment around AMD on Stocktwits remained in the ‘neutral’ zone.

However, users on the platform focused on recent analyst downgrades amid intensifying competition.

Unlike its peers. Broadcom and Nvidia, AMD’s stock is down 22% in the last year. 

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Read also: AMD Stock Hits Over One-Year Low Amid Rising Competition, Analyst Downgrades: Retail Loses Patience