Nvidia Stock Is Slipping. What AMD Earnings Mean for the AI Chip Leader.

Nvidia chips are the favored choice for training artificial-intelligence models. (Courtesy NVIDIA)

Nvidia stock was edging down early on Wednesday. The chip maker could face delays in being able to sell its artificial-intelligence processors to Chinese customers.

Nvidia shares were down 0.6% at $177.28 in early trading. The stock fell 1% on Tuesday.

The reason for the drop could lie with smaller peer Advanced Micro Devices . AMD gave upbeat revenue guidance in its earnings report late Tuesday, but the company wasn’t counting expected sales to Chinese customers—the company is still waiting for its licenses to sell to be approved by the U.S. government. AMD shares were down 6.4% in early trading.

That could mean Nvidia will also face delays in planned shipments of its H20 chip for the Chinese market. The Trump administration recently reversed its export curbs on Nvidia’s China exports, which Nvidia said cost the company $10.5 billion in revenue across the April and July quarters.

It’s not just on the American side where Nvidia might face obstacles. The company was asked last week by the Chinese cybersecurity regulator to explain “backdoor security risks” associated with its chips.

“There are no back doors in NVIDIA chips. No kill switches. No spyware,” Nvidia said in a blog post late Tuesday. A Chinese version of the post was published on WeChat.

Nvidia declined to comment on whether it expects delays in resuming H20 sales.

AMD CEO Lisa Su also said her company’s new AI chips, the MI350 series, are “very competitive” with Nvidia’s Blackwell hardware in a call with analysts. However, most Wall Street analysts don’t expect AMD to pose any significant challenge to Nvidia’s market share until it can provide rack-scale AI systems incorporating chips, networking, and software.

“While AMD has made significant progress, we view Nvidia hardware as generally ahead by 0.5-1 year, particularly in the system/rack approach, where AMD currently has no experience of building in large scale,” wrote BofA Securities analyst Vivek Arya in research note on Wednesday. He rates AMD stock at Buy with a $200 price target.

Write to Adam Clark at adam.clark@barrons.com