Why Nvidia and other chip stocks are mostly shrugging off latest China rules

MW Why Nvidia and other chip stocks are mostly shrugging off latest China rules

By Emily Bary

The U.S. government's latest export restrictions on semiconductor technology to China were telegraphed in advance and aren't as severe as once feared

There aren't a lot of dramatic premarket stock moves in the semiconductor sector on Monday, despite the Biden administration's further export restrictions of advanced technologies to China.

The reason? The latest rules largely were telegraphed in advance, and the actual details don't seem as bad as some initially feared.

The Wall Street Journal reported that the latest export rules, which mark the Biden administration's fourth such bout in three years, restrict sales of memory chips and general semiconductor equipment to China. Additionally, the Biden administration put 140 Chinese companies on a trade blacklist, according to the report.

MarketWatch has reached out to the U.S. Department of Commerce for comment.

Mizuho desk-based analyst Jordan Klein wrote that the "much-anticipated" restrictions seem in line or less severe than anticipated. For example, at one point there was thinking that 200 names could get added to the restricted list.

"The export curbs stop short of earlier proposals as fewer Huawei suppliers have been added to the trade entity list than first proposed," Piper Sandler's Harsh Kumar wrote in a weekend report ahead of the official orders.

Further, Mizuho's Klein noted that chip-equipment stocks including Lam Research Corp. $(LRCX)$ and Applied Materials Inc. $(AMAT)$ saw moderate relief rallies on Friday as news trickled out about what the final rules would contain.

See more: ASML, other chip-related companies rally on report of possible ease in U.S. restrictions on sales to China

Those stocks are up fractionally in Monday's premarket trading. Meanwhile, shares of memory maker Micron Technology Inc. $(MU)$ are down fractionally, as are shares of semiconductor behemoth Nvidia Corp. $(NVDA)$

-Emily Bary

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December 02, 2024 08:38 ET (13:38 GMT)

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