Nvidia Stock Struggles Again. Why Trump’s China Talks Are Vital.

Nvidia is the world’s most valuable company, boasting a market capitalization north of $4 trillion. (David Paul Morris/Bloomberg)

Key Points

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• Nvidia shares slipped 0.9% to $175.05 in morning trading, while the S&P 500 and Nasdaq each fell about 0.2%.
• U.S.-China trade talks have progressed, potentially paving the way for a deal on semiconductors, benefiting Nvidia.
• New $100,000 fee for H-1B visas, used by Nvidia, could significantly increase costs for retaining foreign workers.

Nvidia stock was slipping early Monday. But U.S.-China trade talks appeared to take strides forward over the weekend in a good sign for the wider chips sector.

Shares were down 0.9% to $175.05 in morning trading, while the S&P 500 and Nasdaq each fell about 0.2%. The chip maker’s stock rose 0.2% in the previous trading session, however closed last week down 0.7%.

Nvidia shares have struggled for direction since its latest earnings report in August, as investors await clarity on its future in China.

The tech giant has become caught up in the trade negotiations between the world’s two largest economies. The latest hot issue is TikTok, the Chinese-owned social media app that is facing a U.S. ban over national security concerns unless it divests its operations in the country.

The White House said over the weekend a deal has been made and TikTok’s algorithm, which decides what video users see, will be “controlled by America.”

It remains to be seen what the next phase of trade talks will bring and Nvidia investors will be watching for clues about whether a deal on semiconductors may be near. An agreement on TikTok may clear the path for an agreement on chips.

The U.S. has long banned the sale of Nvidia’s most advanced products to China, also over national security concerns. China, meanwhile, has told domestic companies not to buy U.S.-made chips as it tries to promote its own chip-making capabilities.

President Donald Trump and China’s leader Xi Jinping spoke on the phone Friday and agreed to talk more, including at a late-October event. It wasn’t immediately clear where the countries currently stand on tariffs.

Separately, the Trump administration announced Friday a $100,000 fee for H-1B visas, an employment visa for highly skilled workers. Big Tech names including Nvidia are major users of the H-1B visa and the new charge could mean big costs to the companies if they want to keep their foreign workforce, depending on the ultimate details of the proclamation.

Write to Elsa Ohlen at elsa.ohlen@barrons.com