Nvidia Stock Drops as Huawei Readies Ascend 910D

Nvidia $NVDA ( ▲ 2.59% ) shares fell over 3% today as China's tech giant prepares to launch its advanced Ascend 910D processor amid escalating US-China tech tensions.

Market Impact and Latest Developments

Nvidia (NVDA) shares dropped 3.48% today to $107.15, extending recent losses as investors reacted to reports that Chinese tech giant Huawei is preparing to test its most advanced artificial intelligence processor yet^10,^15.

This continues a challenging period for the semiconductor leader, with its stock now down approximately 17% year-to-date in 2025.

The sell-off follows weekend reports that Huawei has approached several Chinese technology companies about testing its new Ascend 910D chip, which the company hopes will outperform Nvidia's H100 processors^9,^13.

This development comes at a particularly sensitive time, as Nvidia is still reeling from new export restrictions imposed by the Trump administration earlier this month.

Market Snapshot: April 28, 2025
NVDA Opening Price: $109.68
NVDA Current Price: $107.15
Day's Change: -3.48%
Trading Volume: 84,149,033 shares
Year-to-Date Performance: -17%

This marks the second significant drop for Nvidia in April related to Chinese competition.

On April 21, the stock fell 4.51% to close at $96.91 following initial reports that Huawei was preparing to ship its Ascend 910C AI chips to Chinese customers^1,^10.

Huawei's AI Chip Strategy

Huawei's aggressive push into advanced AI chip development represents a direct response to US export restrictions that have cut Chinese firms off from access to Nvidia's most advanced processors^4.

The company's upcoming Ascend 910D chip is still in early development stages, with the first samples expected to arrive in late May, according to sources familiar with the matter^9,^17.

The Chinese tech giant is simultaneously ramping up production of its current generation chips, with plans to deliver more than 800,000 units of its Ascend 910B and 910C models to customers, including state-owned telecom operators and private AI developers such as ByteDance, TikTok's parent company^12,^22.

Huawei's focus on AI chip development accelerated after the US banned the export of Nvidia's H100 chip to China in 2022, even before it was officially released. Since then, the company has achieved significant manufacturing improvements, boosting yield rates of its Ascend series from 20% to nearly 40% over the past year^19.

Key Differences: Huawei Ascend vs. Nvidia Chips

Impact of Trump's Export Restrictions

The current situation stems from President Trump's decision earlier this month to effectively ban the export of Nvidia's H20 chips to China. The H20 was specifically designed for the Chinese market to comply with previous export regulations, but has now been added to a growing list of semiconductors restricted for sale to China^14,^16.

This regulatory shift has forced Nvidia to write down approximately $5.5 billion in inventory and contracts for the first quarter^21.

Analysts at JPMorgan estimate the total revenue impact could reach up to $16 billion for Nvidia's current fiscal year^12,^23.

Timeline: US-China AI Chip Restrictions
2022: US blocks Nvidia's H100 chip exports to China before official release
2023: Nvidia develops H20 chip specifically to meet China export regulations
April 2025: Trump admin effectively bans H20 exports to China
April 16, 2025: Nvidia announces $5.5 billion financial hit from restrictions
April 28, 2025: Nvidia stock falls as Huawei readies Ascend 910D competitor

In a regulatory filing this month, Nvidia revealed that the restrictions create significant business uncertainty in China, which represented approximately $17 billion (or 13%) of the company's total revenue in fiscal 2025^21.

Technological Competition and Manufacturing Challenges

While Huawei's ambitions to compete with Nvidia are clear, significant technical challenges remain.

The company currently relies on China's Semiconductor Manufacturing International Corp (SMIC) to produce its chips using a 7nm process, whereas Nvidia's latest chips are manufactured using TSMC's more advanced 3nm or smaller processes^5,^11.

This technological gap limits Huawei's ability to match Nvidia's raw performance in certain areas.

The company is attempting to overcome these limitations through system-level innovations like its recently introduced CloudMatrix 384, which connects 384 Ascend 910C chips to create a powerful computing platform^22.

Huawei and SMIC are also racing to develop more advanced manufacturing capabilities, with plans to begin 5nm process operations next year.

However, this still lags behind the leading-edge processes used by Nvidia's manufacturing partners^5.

Broader Market and Industry Impact

The AI chip competition between the US and China is creating ripple effects across the semiconductor industry. Other chip manufacturers saw their stocks decline today as well, reflecting investor concerns about escalating trade tensions^21.

For investors, the key question is whether Huawei can successfully fill the void left by Nvidia in the Chinese market.

Analyst Matt Bryson from Wedbush Securities raised this point in a client note, stating: "If SMIC can overcome these obstacles and U.S. restrictions persist, new products from Huawei could potentially limit Nvidia's market opportunities in China permanently"^1.

Recent Performance of Major Semiconductor Stocks (April 28, 2025)

Financial Perspective and Future Outlook

Despite recent challenges, Nvidia's overall financial performance remains strong.

For its fiscal year 2025 ending January 26, 2025, the company reported revenue of $130.5 billion, up 114% from the previous year, with non-GAAP earnings per share of $2.99, up 130% year-over-year.

The company's AI-driven data center business has been its primary growth engine, with data center revenue surging 409% in 2023.

Analysts had forecast Nvidia's full-year revenue to reach approximately $111.3 billion in 2025, though these projections may need revision in light of recent export restrictions.

Looking ahead, we are closely watching for several key developments:

1. How quickly can Huawei ramp up production of competitive AI chips?

2. Will other Chinese tech companies increase domestic chip orders?

3. Could the Trump administration implement additional export controls?

4. How will Nvidia adjust its strategy to maintain growth despite Chinese market challenges?

   Nvidia's Recent Quarterly Performance
   Q4 FY25 Revenue: $39.3 billion (+78% YoY)
   Q4 FY25 Gross Margin: 73.5% (non-GAAP)
   Q4 FY25 EPS: $0.89 (+71% YoY)
   Full Year FY25 Revenue: $130.5 billion (+114% YoY)
   

Long-term Strategic Implications

The current situation highlights a growing technological decoupling between the US and China. As US restrictions tighten, China is accelerating efforts to build an independent, self-sufficient semiconductor ecosystem.

Huawei's Ascend AI chip development is part of China's broader national strategy to reduce dependence on Western technology.

Speaking at a Political Bureau study session on Friday, Chinese Premier Xi Jinping emphasized the urgency for the country to "master core technologies such as high-end chips and foundational software" and build an "independent, controllable, and collaboratively functioning AI foundational software and hardware system"^4.

For Nvidia, the challenge will be maintaining its technological edge and finding growth opportunities in other markets while navigating complex geopolitical tensions. The company has been investing heavily in expanding US manufacturing capabilities, recently committing $500 billion to strengthen the domestic AI supply chain^21.

As this technological competition intensifies, both companies and investors will need to adapt to a new landscape where geopolitical considerations play an increasingly important role in technological development and market access.