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Stock Market Live: Tech Stocks Hammered as VanEck Semiconductor ETF (SMH) Down 3.75%
By
Joel South
Updated
·
Published
Key Points
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S&P 500 down 1.00% heading into the mid-day trading.
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NVIDIA has $5.5 billion at risk on its H20 processors.
Live Updates
U.S. to Isolate China
U.S. authorities are preparing to engage in talks with over 70 countries, urging them to block Chinese goods from passing through their territories, according to the WSJ. The U.S. aims to economically “cut off” China.
This aligns with President Trump’s recent statement suggesting nations might need to choose between aligning with the U.S. or China. The approach seems to focus on fully isolating China, while China has pledged to stand firm.
Technology Stocks Upgrades and Downgrades
MSFT (Microsoft)
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Downgrade Details: BMO Capital reduced price target from $490 to $470, maintains Outperform rating.
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Reason: Slower growth in Azure’s legacy cloud business due to weaker economy, leading to reduced Azure growth estimates for next few quarters and FY26.
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Insight: Experts indicate slowdown in core legacy cloud businesses. BMO suggests lower capex intensity in FY26 could be a positive catalyst for shares.
NVDA (Nvidia)
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Issue: U.S. Government now requires licenses to ship H20/equivalent AI chips to China and arms-embargoed countries. Nvidia announced $5.5B charge in fiscal Q1 for inventory, purchase commitments, and reserves.
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Impact: Charge suggests high likelihood of H20 restrictions and low chance of future licenses. Q1 GAAP EPS may take a 20% hit, but non-GAAP sales/EPS less affected.
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Analyst View: BofA calls restriction “unwelcome but somewhat expected,” deems risk “manageable.” Maintains Buy rating, but lowered price target from $200 to $160.
MRVL (Marvell)
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Downgrade Details: BofA cut price target from $120 to $72, retains Buy rating.
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Context: Expects Q1 results to beat due to conservative outlooks and tariff-related demand pull-ins. However, tariffs pose risks:
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Modest tariffs: 4%-6% sales hit, 12%-13% EPS hit.
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Deeper tariffs: 9% and 12% sales decline in 2025 and 2026, respectively.
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Reason: Lowered targets across semis coverage due to growing tariff uncertainty.
TSLA (Tesla)
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Downgrade Details: Piper Sandler reduced price target from $450 to $400, maintains Overweight rating.
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Reason: Q1 deliveries (337,000 units) missed consensus, likely pushing gross margins to multi-year lows. Lack of clarity on Model 2 specs/pricing hinders reliance on new products for growth.
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Outlook: Short-term bearish due to weak Q1 financials, but “big picture” catalysts could drive sharp rallies. Estimates cut to reflect challenging near-term outlook.
The semiconductor sector’s woes are hammering tech ETFs, with funds heavy in Nvidia and other chipmakers leading the market’s slide.
The VanEck Semiconductor ETF (SMH | SMH Price Prediction), packed with names like Nvidia, AMD, and ASML, cratered over 3.75% after the U.S. tightened export controls on AI chips to China. Nvidia, the ETF’s top holding, warned of a $5.5 billion charge as its H20 processors now require export licenses. The restrictions also hit AMD as the company export controls to apply to MI308 products, resulting in $800 million. Both stocks plunging close to 6% so far today. ASML, a key supplier of chip-making equipment, sank 5.75% after dismal order numbers and tariff warnings.
- Nasdaq Composite: -1.76%
- S&P 500: -1.00%
- Dow Jones Industrial Average: -0.42%
Today’s selling pressure raised the CBOE VIX index 3% after market fear dissipated the past two days.
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About the Author
Joel South →
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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