NVDA, TSMC, AVGO: Chip Stocks Fall on Reports U.S. May Further Restrict Exports to China

Leading semiconductor stocks such as Nvidia (NVDA), Broadcom (AVGO), and Taiwan Semiconductor Manufacturing Co. (TSM) are down on June 20 as reports surface that the U.S. government may further restrict the export of microchip and semiconductor technology to China.

Specifically, the U.S. Commerce Department is considering terminating waivers that allow some chipmakers to send American technology to factories in China, including Taiwan Semiconductor that is based in the Chinese territory of Taiwan and manufactures about two-thirds of the world’s microchips.

Other chip and semiconductor stocks that are down on news of the potential U.S. government curbs include Qualcomm (QCOM) and Marvell Technology (MRVL). The latest move by the U.S. government comes as America and China hold a loose agreement on tariffs and an uneasy truce in their ongoing trade battle. Controls around microchips and semiconductors reportedly remain a sticking point.

Digital Oil

Microchips and semiconductors are often referred to as the oil of the 21st Century or digital oil. The U.S. has issued several chip export changes this year under the administration of U.S. President Donald Trump. China has called the U.S. rule changes “discriminatory” and retaliated by restricting some critical metals and rare earth minerals.

For U.S. chipmakers such as Nvidia and Broadcom, these would be the latest government curbs that could impact their global sales, limiting their ability to sell advanced artificial intelligence (AI) chips into China due to national security concerns. During its most recent earnings report, Nvidia said current export restrictions on its China-bound microchips cost the company about $8 billion in lost sales.

Is NVDA Stock a Buy?

The stock of Nvidia has a consensus Strong Buy rating among 40 Wall Street analysts. That rating is based on 35 Buy, four Hold, and one Sell recommendations assigned in the last three months. The average NVDA price target of $173.19 implies 19.05% upside from current levels.

Read more analyst ratings on NVDA stock