Semiconductor stocks demonstrate mixed movements in premarket trading, linked to significant events impacting Nvidia, AMD, and Intel.
Unusual Revenue-Sharing Deal Creates Market Uncertainty for Nvidia and AMD
Nvidia and AMD have agreed to pay the U.S. government 15% of their revenue from advanced AI chip sales to China, marking an unprecedented arrangement in the semiconductor industry. This deal applies to chips like Nvidia’s H20 and AMD’s MI308, which are specifically designed for artificial intelligence applications in the Chinese market. This agreement comes as a condition for obtaining export licenses after the Trump administration initially halted H20 chip sales to China in April 2025.
The revenue-sharing arrangement represents a double-edged sword for both companies as it allows them to maintain access to the lucrative Chinese market but also creates significant financial and strategic risks.
Intel CEO’s White House Visit Signals Potential Turnaround Opportunity
In contrast, Intel's stock is gaining 1.50% to $20.25 as investors react positively to the news that CEO Lip-Bu Tan will visit the White House on Monday. This meeting follows Trump's call for Tan’s removal last week over concerns about his ties to companies associated with the Chinese military. The visit represents a crucial opportunity for Tan to address these concerns and potentially strengthen Intel's relationship with the current administration.
Despite the challenges, the White House meeting could prove beneficial for Intel’s long-term prospects.
Market Perspectives and Risks for Semiconductor Sector
The market shows interest in how the unusual conditions set for Nvidia and AMD may affect their financial outcomes moving forward and how successful Intel’s policy may become in this context. Critics also raise questions regarding the safety and advisability of the arrangement, which appears more like a penalty than a cooperative agreement between companies and the government. These factors create uncertainty regarding future trade relations between the US and China.
The situation in the semiconductor market illustrates the complexities faced by leading companies and underscores the importance of flexible strategies amid political and economic changes.
