Nvidia shares slump 20% in 2025; here's what's troubling Jensen Huang and why the stock is falling
Nvidia has been one of the brightest stars in the artificial intelligence boom because of the wave of demand sparked by the success of OpenAI's ChatGPT in 2022. But in 2025, the tide has started to turn.
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From AI Superstar to Market Struggler
The stock of the chipmaker has declined about 20% this year, following a sharp 171% rise in 2024, as per a report. Behind the sudden change of fortune is a lengthening list of problems, most significantly in China, which was once one of Nvidia's most profitable markets, as per The Street. CEO
Jensen Huang
is now confronted with a combination of geopolitical, competitive, and financial headwinds that are beginning to bear down on the company.
Nvidia, the market-leading provider of graphics processing units (GPUs) to drive AI research and applications, has been among the largest beneficiaries of worldwide AI spending, according to the report. As companies revamped infrastructure to accommodate AI tools, Nvidia's revenue skyrocketed, as per The Street.
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But the firm's hold on the Chinese market is weakening. A sequence of progressively tighter US export controls, intended to restrict China's access to cutting-edge AI technology, has strangled Nvidia's capacity to sell Nvidia's top AI chips in the country, reported The Street.
Huang recently acknowledged that sales are "about half of what it was before the export control," quoted The Street.
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Tariff Tensions Make It Worse
But the condition worsened last month when the Trump administration tightened export controls, shutting down the exports of Nvidia's H20 chip, which is specially designed for China, as per the report. The action caught investors off guard when Nvidia reported a $5.5 billion write-down in the first quarter due to the remaining H20 inventory, according to The Street.
This came at a time when US president Donald Trump's tariffs war with China has increased and the US has imposed 145% tariffs on Chinese products, in response China increased its own tariffs to 125%, as per the report
Huawei Steps In With a Local Alternative in China
Compounding Nvidia's woes is a head-on challenge from an emerging rival. Nvidia's Chinese competitor, Huawei, has announced a new AI chip to challenge Nvidia's dominance, reported The Street. Its soon-to-be-released Ascend 920 chip, which is built on SMIC's 6-nanometer technology, is placed as an alternative to Nvidia's H20, as per the report. While its current 910C and 910D chips already keep up with Nvidia's popular H100 GPU, reported The Street.
Testing on Huawei's 910D will begin in May, and production of the 910C is expected to ramp up later this year, as per the Wall Street Journal. Chinese tech leaders like ByteDance, Alibaba, and Tencent are lining up to tap into these domestically produced alternatives, potentially filling the void left by Nvidia, according to the report.
FAQs
Why is Nvidia's stock down in 2025?
A combination of export restrictions, loss of China sales, and rising competition from Huawei.
Why can't Nvidia sell its H20 chips?
New US export restrictions shut down those exports to China.
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