Nvidia shares suffer another setback

Nvidia shares fell 7% last night.

Laura Stewart

Author bio Laura Stewart is a Finance Editor at The Motley Fool, where she covers Australian and international equity markets. She joined the company in 2022, following a career transition from legal advisory work in Southeast Asia into the investment industry. Prior to her current editorial role, Laura spent three years as an Equity Analyst and Writer, producing investment research across the ASX, NYSE, and NASDAQ. Her coverage included small-cap growth companies, thematic investment ideas, and high-quality U.S.-listed businesses. Laura holds a Master of Applied Finance and brings additional expertise in accounting, taxation, and estate and wealth planning from her postgraduate studies. She also has a background in law and communications, which supports her analytical and reporting work in financial markets. Outside of work, she enjoys spending time in the Adelaide Hills with her flock of sheep. Education Laura holds a Bachelor of Laws, a Bachelor of Communication (Journalism), and a Bachelor of Commerce with majors in Accounting and Corporate Finance. In 2025, she completed a Master of Applied Finance at the University of Adelaide, receiving postgraduate awards in Accounting Concepts & Methods, Ethical Principles in Accounting & Finance, Real Estate Valuation & Investment, and Tax, Estate & Wealth Planning. Social media LinkedIn FYI – I am taking a break from social media at the moment, so this account isn’t active at the moment, but I will let you know when I rejoin. Favorite investment quote "Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn't... pays it." — Albert Einstein

Published April 17, 2025 2:19 pm AEST

It's been a tough year for Nvidia Corporation (NASDAQ: NVDA) shares, with the company suffering several major setbacks in the space of a few months.

In February, Nvidia's share price fell nearly 20% when Chinese startup company DeepSeek arrived on the scene.

Earlier this month, Nvidia shares were further harmed as US President Donald Trump unveiled his reciprocal tariffs. This sent Nvidia's share price to a 6-month low of $87. While some of this decline has since been recovered, the chip maker faces a new hurdle.

A man lays his head down on his arms at his desk in front of an array of computer screens and a laptop computer. — Image source: Getty Images

Nvidia faces new restrictions

This week, Nvidia shares encountered another setback. The US government notified that it will now require a special license to ship its H20 graphic processing units or related hardware to China, and the license will be required indefinitely.

Based on this development, according to its latest US Securities and Exchange Commission filing, Nvidia expects to face a potential US$5.5 billion charge in its upcoming quarterly financial results.

Nvidia's share price fell 7% on this news.

Nvidia's advanced graphics processing units (GPUs) have already been banned for export to China. The H20 GPU was specifically designed to comply with export rules introduced during the Biden Administration. Last year, the chips generated an estimated US$12 billion to US$15 billion in revenue, according to CNBC.

Advanced Micro Devices voiced similar concerns, noting in a filing that it expects a US$800 million charge related to its MI308 products.

These disclosures from Nvidia and Advanced Micro Devices appear to be the first major warning that the Trump administration's battle with China could prove a major headwind for companies in the semiconductor supply chain.

While the Trump Administration has flagged exemptions for some electronics, such as semiconductors, there have also been talks of introducing a separate tariff in the future. The future remains uncertain for US technology stocks, which is never well-received by investors.

US-focused ASX ETFs feel the impact

As the world's third-largest listed company, any changes in Nvidia's share price have a material impact on the S&P 500 Index (SP: .INX) and the Nasdaq Composite Index (NASDAQ: .IXIC). Those invested in exchange-traded funds (ETFs) such as the iShares S&P 500 AUD ETF (ASX: IVV) or the Betashares Nasdaq 100 ETF (ASX: NDQ), which track these indices, are affected by these movements. Investors of the Global X Fang ETF (ASX: FANG) and the Global X Semiconductor ETF (ASX: SEMI) are also impacted, with Nvidia comprising 10.6% and 9.8% of these ETFs, respectively.

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