TLDR
- Nvidia shares fell 3.4% total on Tuesday as AI chip sector faces pressure from China sales uncertainty
- AMD CEO Lisa Su forecasts only $100 million China revenue for Q1, citing “very dynamic situation”
- Nvidia’s $30 billion H200 chip deal with Chinese firms awaits final U.S. government approval
- AMD beat Q4 earnings with $10.3 billion revenue but stock dropped 6.98% in pre-market trading
- Data center segment shows strength at $5.4 billion for AMD while memory shortage threatens PC business
Nvidia took a beating on Tuesday as uncertainty around Chinese chip sales dragged down the entire AI sector. The stock fell 2.8% during regular trading.
After-hours trading added another 0.6% decline. The drop came despite Nvidia’s dominant position in the AI chip market.
The broader AI sector is struggling lately. New AI tools have hurt software and legal-services companies.
Yet chip makers aren’t benefiting from this shift. Investors seem to be sitting on the sidelines waiting for clear catalysts.
China Revenue Remains Major Question
China sales could provide that catalyst. But right now, nobody knows when or if these deals will happen.
AMD’s earnings call Tuesday revealed the extent of the uncertainty. CEO Lisa Su said the company saw some Q4 revenue from China.
For Q1, AMD expects just $100 million from the region. Su told analysts they’re “not forecasting any additional revenue from China just because it’s a very dynamic situation.”
That cautious tone matters for Nvidia too. The company’s China sales still need final approval from Washington.
The Financial Times reported the deal remains under national security review. Until that clears, Nvidia can’t move forward.
Beijing has reportedly authorized firms like Alibaba to prepare H200 chip orders. Chinese companies want about 1.5 million chips.
KeyBanc analyst John Vinh pegs the total value at $30 billion. Nvidia agreed to give the U.S. government a 25% cut of those sales.
AMD Beats Estimates But Stock Falls
AMD crushed Q4 expectations on Tuesday. Earnings per share hit $1.53 on revenue of $10.3 billion.
Analysts had projected $1.32 EPS on $9.6 billion revenue. The company also issued a solid Q1 forecast.
None of that mattered to traders. Pre-market trading showed AMD down nearly 7%.
The data center business stayed hot. Revenue reached $5.4 billion, beating the $4.97 billion estimate.
Client business brought in $3.1 billion versus the $2.9 billion forecast. Gaming revenue came in slightly light at $843 million.
Memory shortages are creating new problems. PC makers might have to raise prices, which could kill demand.
AMD showed off new hardware at CES 2026 last month. The Helios rack-scale server takes direct aim at Nvidia’s offerings.
The MI500 GPU series promises 1,000x performance gains over older chips. CEO Su thinks the AI data center market will hit $1 trillion by 2030.
Competition is heating up from unexpected places. Google, Amazon, and Microsoft are all building custom chips for their data centers.
Over the past year, AMD stock jumped 112% while Nvidia climbed 54%. Worries about AI overspending continue to create swings in both stocks.
AMD forecast Q1 revenue between $9.5 billion and $10.1 billion, ahead of the $9.4 billion Street estimate.
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