Nvidia Stock Falls 4% — U.S-China Tensions Rattle AI Chip Investors

This article first appeared on GuruFocus.

Oct. 15 Nvidia Corp. (NASDAQ:NVDA) shares moved lower on Tuesday as renewed U.S.China trade friction and rising competition in the AI hardware market weighed on investor sentiment.

The stock fell about 4% to $181 in morning trading, giving back part of Monday’s nearly 3% gain. The pullback came as China’s transport ministry said it was reviewing a U.S. probe into Chinese shipping firms, fueling concerns that trade relations between the world’s two largest economies could worsen.

Semiconductor peers also retreated, with Broadcom (NASDAQ:AVGO) slipping nearly 3%. The broader chip sector was under pressure as investors assessed new competition in the high-performance AI market.

Focus shifted to Broadcom after it unveiled a 10-gigawatt AI accelerator deal with OpenAI, mirroring a similar agreement Nvidia reached last month to supply infrastructure for the startup. Analysts said the development highlights the intensifying race for computing power among major chipmakers and cloud providers such as Meta Platforms (NASDAQ:META) and Alphabet’s Google (NASDAQ:GOOGL).

Nvidia also introduced the DGX Spark, described as a compact AI supercomputer aimed at developers building local AI agents. The product expands Nvidia’s reach beyond data centers into smaller-scale environments.

Despite the decline, analysts largely view the weakness as temporary, noting Nvidia’s strong developer ecosystem and dominant software platform continue to underpin its long-term growth outlook.