NVIDIA Corporation’s shares dropped 1.4% after China blocked imports of its H200 AI chips. This decision by Chinese customs comes even though NVIDIA complied with U.S. export regulations, raising worries about its ability to access the market. This situation unfolds amid U.S. restrictions on semiconductor exports to China. China’s decision suggests that enforcement measures could impact NVIDIA, regardless of those rules. The main concern is how this will affect NVIDIA’s growth because the company relies on sales in China for data center and AI hardware.

Tech Stock Decline

This news led to a broader decline in tech stocks, as investors reassessed their exposure amid policy uncertainties. Despite the downturn, NVIDIA remains a strong player in the AI chip market, making it sensitive to international trade conditions. Over the last year, NVIDIA’s shares have risen by 34.3%, thanks to strong earnings and strategic moves in AI. In comparison, STMicroelectronics and Texas Instruments saw their shares change by 13.1% and -2.1%, respectively, showing differing outcomes within the industry. NVIDIA’s performance highlights the challenges global tech supply chains face due to geopolitical tensions. China blocking H200 chip imports creates significant uncertainty for NVIDIA’s revenue forecast. This could lead to greater price volatility in the stock in the coming weeks. We noted that implied volatility on near-term NVDA options surged over 15% during yesterday’s trading, and we expect it to stay high as the market processes this news.

Hedging and Market Strategy

Sales to China accounted for nearly 15% of data center revenue in the last quarter of 2025, so any long-term blockage poses a serious challenge. Buying put options may be a smart way to protect existing long positions or to bet on further decreases toward key support levels. We are closely watching for updates from either the company or Chinese officials that could drive the stock lower. We should also remember how the market reacted in the fall of 2025 when rumors about new U.S. export controls emerged, causing a brief drop. That dip was later viewed as a buying opportunity since strong demand from other regions offset the weakness. This suggests that selling out-of-the-money puts for the now higher premium could be a good strategy for those who think this is a short-lived overreaction. In the short term, our attention will be on how NVDA stock performs around its 50-day moving average, a key technical support level it is nearing. A significant drop below this level could indicate a longer correction before the next earnings report. Ultimately, the market needs to determine if this blockage is a formal policy or just a temporary setback before a clear trend can be established. Create your live VT Markets account and start trading now.

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