Nvidia (NVDA) lead chip stocks lower Tuesday amid a spate of analyst downgrades and broader sector repricing following last week's move by the Biden administration to restrict tech exports to China.
A warning on near-term revenue growth from Advanced Micro Devices (AMD), as well as weakening PC and smartphone demand, added pressure to already-weakened chipmakers late last week, with President Joe Biden's decision to severely limit the sale of equipment to China-based firms used in the making of advanced semiconductors providing further downside momentum.
Reuters, meanwhile, reported late Monday that KLA Corp. (KLAC), which makes chipmaking equipment will begin complying with the Biden order this week, cutting off the sales of some of its products -- including those made by Intel (INTC) and SK Hynix -- to its biggest geographic market.
Overnight in Asia, the impact of the Biden export curbs reverberated throughout the region's tech stocks, with Taiwan Semiconductor Mfg. Co. Ltd., (TSM) the world's biggest contract chipmaker and a lead supplier for Apple Inc. (AAPL) iPhones, falling more than 8.3% in Taiwan trading.
In the U.S., Intel was also hit after analysts at Wells Fargo cut their price target on the chipmaker, citing a sharp decline in near-term sales amid broader weakness in the sector.
Nvidia, meanwhile, had its price target cut by $38 at Citigroup, to $210 per share, amid moderating growth rates in the sale of cloud computing chips.
Marvell Technology MRVL shares, however, edged higher after analysts at Wells Fargo boosted their rating on the the 5G and cloud-focused chipmaker, citing its insulation from macro trends that are hitting the broader semiconductor sector.
Wells Fargo analyst Gary Mobley lifted his rating to 'overweight' from 'equal weight', while keeping his $58 price target in place, noting that the group's fundamentals will allow it to outperform peers when the global economy "finds more sure footing".
Nvidia shares were marked 2.4% lower in early Tuesday trading to change hands at $113.85 each. Intel shares were marked 1.35% lower at $24.86 each while KLA shares fell 4.6% to $285.48 each.
Marvell shares were marked 3.85% lower at $38.75each.
