Chips Get Slapped In The Face

The untouchable stock just got touched.

China just did a rug pull on chip darling Nvidia (NVDA).

Yes, that’s right, this is the company valued at over $4.3 trillion, and that’s not a typo.

NVDA’s market cap is so large that this single stock comprises 9% of the S&P 500.

It’s almost unfair.

This is the company that China is going after, and if China gets its way, the pullback could be brutal.

Economic relations continue to be strained with China, and the way this will manifest itself in American tech companies is like what just transpired via a recent decision by China’s Cyberspace Administration of China (CAC) to order major tech firms like ByteDance, Alibaba, and Baidu to halt testing and cancel orders for Nvidia’s RTX Pro 6000D chip, a product tailored for the Chinese market.

This attack represents a significant setback for Nvidia and could ripple across American chipmakers.

China is one of the leaders in high-end technology production, from products like cell phones, and has increasingly flowed to higher parts of the value-added product line-up like EVs, drones, and spacecraft.

Nvidia faces the most direct impact from this ban. The RTX Pro 6000D was designed to comply with U.S. export controls while meeting China’s demand for high-performance chips in AI and data centers.

China historically contributed significantly to Nvidia’s revenue—26% in 2022, or roughly $7 billion annually, though this share has declined to an estimated 15–20% in 2025 due to prior U.S. restrictions.

The loss of these orders exacerbates existing pressures from U.S. export controls, which already limit Nvidia’s ability to sell high-end chips like the H100 and A100 in China.

The RTX Pro 6000D was a workaround, and its ban signals Beijing’s willingness to retaliate against U.S. restrictions, potentially targeting Nvidia’s remaining market share. Investors may fear further escalation, such as broader bans on Nvidia’s lower-end chips or retaliatory measures against other U.S. tech firms operating in China.

The ban’s implications extend to other American chip companies, notably AMD, Intel, and Broadcom, which also supply China’s tech ecosystem. While the CAC’s order specifically targets Nvidia’s RTX Pro 6000D, it signals a broader Chinese strategy to reduce reliance on U.S. semiconductors amid escalating tech tensions. This could pressure stock prices across the sector in the short term, as investors reassess exposure to China’s $574 billion semiconductor market.

AMD competes with Nvidia in AI and data center chips, with products like the MI300 series gaining traction. China accounts for about 15% of AMD’s revenue.

The ban on Nvidia’s chip could raise concerns about similar restrictions on AMD’s offerings, especially as China promotes domestic alternatives like Huawei’s Ascend series.

The important takeaway here is that China wants a domestic-owned chip company to step up and supply these high-end chips. They want to accomplish this while taking away revenue from the United States. This zero-sum game has gone into overdrive and could materially hurt chip companies’ next earnings.

I would urge caution for investors and adopt a wait-and-see approach in chip stocks.