Trade Wars: How New Rules Shake Up Nvidia, AMD & ASML
This week, new rules banned companies like Nvidia from selling advanced chips to China – a move that could cost billions. Here’s what moved the markets this week.
Nvidia & AMD: U.S.-China Chip Tensions Hit Hard
Nvidia and AMD shares fell sharply after the U.S. tightened export controls on advanced AI chips to China. Nvidia faces a $5.5 billion writedown, while AMD expects an $800 million hit. Even Nvidia’s H2O chip, designed for earlier rules, is now banned. China is a crucial market—losing it puts pressure on Nvidia’s growth story and opens the door for global competitors.
New restrictions may push customers to explore Nvidia alternatives, threatening long-term growth.
ASML: Uncertainty Slows Big Deals
ASML, the world’s top chipmaking equipment supplier, delivered solid results but saw orders slow. Management mentioned “uncertainty” repeatedly, as customers hesitate to make big purchases amid trade war risks. Despite a 4% drop in shares, ASML still expects growth in 2025 and 2026. Hugo Alpha remains confident in ASML’s long-term potential.
Netflix: Stronger Than Ever
Netflix aims to double revenue and triple profits by 2030. This quarter, revenue rose 13% and operating income jumped 27%. Higher prices didn’t scare off subscribers, and new content is driving engagement. Netflix’s resilience, even as tech stocks wobble, keeps it a top performer.
Gold: Investors Seek Safety
Gold has become the market’s most crowded trade, overtaking tech giants for the first time in two years. Prices hit new highs, up nearly 30% year-to-date. More fund managers now expect gold to be 2025’s best asset. Meanwhile, confidence in U.S. stocks is fading, and European equities are gaining popularity.
Tech Giants Face Antitrust Pressure
The FTC’s case against Meta (Facebook’s parent) could force it to give up Instagram and WhatsApp. Google lost another antitrust case, increasing pressure to break up its ad business. If Meta loses, it risks a major collapse in ad revenue, as billions use its acquired apps.
Why This Matters—Hugo Alpha’s Perspective
- Trade wars and regulation are reshaping the tech landscape. Companies with global exposure face new risks—and opportunities.
- Safe-haven assets like gold are back in favor as investors worry about growth and market volatility.
- Content and pricing power set winners apart—Netflix shows that strong brands can thrive, even in tough markets.
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