Nvidia Stock Drops 4% as Huawei Unveils Potentially Superior AI Chip

Nvidia stocks dropped 4% after Huawei revealed its new AI chip, which may outperform Nvidia’s H100.

NVIDIA Corporation (NASDAQ: NVDA) shares tumbled nearly 4% on Monday, marking one of the steepest declines on the S&P 500, following reports that China’s Huawei Technologies is accelerating development of its Ascend 910D AI processor-a chip analysts say could outperform NVIDIA’s industry-leading H100. The sell-off reflects mounting investor anxiety over geopolitical headwinds and Huawei’s growing prowess in advanced semiconductor design, which threatens NVIDIA’s stronghold in the $300 billion AI chip market.

Huawei AI Chip Could Be a Strong Nvidia H100 Competitor

Huawei is working on a powerful new chip called the Ascend 910D. It’s still being tested but is expected to be faster and more efficient than Nvidia’s best AI chip, the H100. This chip is especially important for training large AI models. If it lives up to expectations, it could be a major threat to Nvidia’s strong position in the $300 billion AI chip market. Huawei is already shipping earlier chip versions (910B and 910C) to major Chinese companies and government-backed organizations, signaling a growing challenge in the AI chip market share.

US-China Tech War Hits Nvidia’s Bottom Line

The stock decline comes on top of a big hit to Nvidia’s revenue due to U.S. export restrictions. The company has already lost $5.5 billion because it can’t sell its H20 chip to China. Analysts estimate this could grow to $16 billion in 2025 if the situation continues. This highlights how the US-China tech war is affecting major semiconductor stocks like Nvidia.

How the Market Reacted?

Nvidia’s stock has been falling throughout 2025. So far, it’s down nearly 20% this year, wiping out about $600 billion in value. The company’s recent earnings show strong revenue growth and profits, but investors are worried about competition and tighter regulations.

What It Means for Investors?

• China’s Tech Push: Chinese companies are working hard to build their own AI chips, reducing their need for U.S. technology.
• Stock Valuation Adjustments: Nvidia’s stock price may stay under pressure as competition heats up.
• Regulatory Risks: U.S. government investigations into Nvidia’s business with China could bring more uncertainty.

Is Nvidia Stock Drop 4% a Buying Opportunity?

Nvidia still leads in GPU technology, but Huawei’s rise creates uncertainty. The real test will come in late May when Huawei’s 910D testing results are released. If it performs as promised, Nvidia may face an even tougher road ahead.

Looking Ahead

Nvidia is still the global leader in AI chips, but Huawei’s new chip might be the most serious challenge yet. Results from Huawei’s testing will be out by late May—and those results could decide whether Nvidia’s current stock dip is a chance to buy or a sign of bigger problems ahead.

As one expert said, “The AI chip race isn’t just about technology anymore—it’s about global politics too.”

Stay tuned for more updates on Awesm AI!