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Escalating US-China Trade War to Hurt These Tech Stocks in 2025
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The ongoing US-China trade war has intensified, with technology being a primary battleground. What began as a tussle over trade imbalances has evolved into a strategic clash over technological supremacy. Over the past few years, the United States has tightened its export restrictions, limiting China's access to advanced semiconductor technologies critical for Artificial Intelligence (AI), 5G and supercomputing. Key players like NVIDIA Corporation (NVDA - Free Report) , Micron Technology, Inc. (MU - Free Report) , Intel Corporation (INTC - Free Report) and QUALCOMM Incorporated (QCOM - Free Report) have been caught in the crossfire, facing regulatory and market challenges that jeopardize their growth prospects.
Recent measures, including the U.S. Commerce Department's export controls on advanced AI chips and chipmaking tools, aim to curb China’s technological advancements. While these restrictions align with the U.S. national security objectives, they have disrupted the semiconductor supply chain and stoked economic tensions. In retaliation, China has imposed restrictions on rare earth metals critical for semiconductor production.
The escalating trade war has created a challenging environment for U.S. tech companies reliant on the Chinese market. As we step into 2025, uncertainties surrounding the conflict are poised to affect revenue streams, supply chains and investor sentiment. Here's a closer look at how leading semiconductor players like NVIDIA, Micron, Intel and QUALCOMM could bear the brunt of these challenges.
NVIDIA has been a proponent of the U.S. government’s restrictions throughout the past three years. In 2022, the U.S. government restricted NVIDIA from selling its A100, A100X and H100 integrated circuits to China and Russia. In 2023, the United States imposed new restrictions on selling two AI chips — A800 and H800 — specifically created for the Chinese market. This year, the U.S. government restricted the export of NVIDIA's advanced A100 and H100 GPUs to China, a key market for AI development.
The U.S. government is continuing its efforts toward restricting China from getting its hands on cutting-edge technologies that can strengthen its military. These kinds of restrictions are going to hurt NVIDIA’s business in China with a negative impact on its top line, margin and cash slows further jeopardizing its ability to support existing customers and complete the development of certain products timely.
Micron Technology had found itself in the middle of this tug-of-war long ago. For the company, chip sales in China make up more than 10% of its total revenues. In October 2022, the United States imposed an export ban on certain advanced chips that are used in data centers for AI, data analytics and computing applications with the intention of stopping these chips from getting into Chinese hands.
Later in 2023, the Cyberspace Administration of China imposed a restriction on Micron on selling its products in key domestic industries on national security concerns. Tit-for-tat actions like these have the potential to jeopardize the company’s prospects, which are already afflicted by the weak demand for its memory chips. Moreover, the memory chip market’s cyclical nature, combined with these geopolitical tensions, could exacerbate its financial volatility in 2025.
Intel’s total revenues experienced a whopping 27% contribution from its Chinese customers in 2023. The company faces unique challenges due to its reliance on both China for manufacturing and the United States for research & development.
China’s latest stance of replacing U.S.-made chips with domestic alternatives has become a concern for Intel. The country’s latest decision to phase out foreign chips from its major telecom networks by 2027, coupled with the U.S. government’s directive to revoke Intel’s chip export licenses to the Chinese telecommunication giant Huawei, has a big potential to affect the company’s top line.
Although Intel has been heavily investing in its foundry business to reduce reliance on Chinese manufacturing, these efforts may take years to bear fruit. The company’s struggles to regain market leadership in the face of geopolitical headwinds could further pressure its bottom line and stock performance in 2025.
QUALCOMM has a lot to lose from the US-China trade war as a major part of its business comes from China. The company has also set up multiple manufacturing facilities in China. In early 2024, Qualcomm faced the same restrictions as Intel where the U.S. government revoked its chip export license for certain technologies to Huawei.
Retaliation from the Chinese trade associations and government can worsen QCOM’s situation. The Chinese government has already put policies, such as the Made in China 2025 initiative aiming for 70% semiconductor self-sufficiency by 2025. These policies can enable QUALCOMM’s existing customers to develop their own chipsets .
The escalating US-China tech war presents a formidable challenge for U.S. semiconductor companies like NVIDIA, Micron, Intel and Qualcomm. These companies are not only grappling with the immediate effects of export restrictions and retaliatory measures but also facing long-term structural shifts in global supply chains and competitive dynamics.
Investors should exercise caution and closely monitor developments in the trade conflict as these could significantly impact the semiconductor industry’s growth trajectory in 2025. While U.S. tech stocks have historically been robust performers, the geopolitical landscape could bring volatility that warrants careful portfolio positioning.
Image: Bigstock
Escalating US-China Trade War to Hurt These Tech Stocks in 2025
The ongoing US-China trade war has intensified, with technology being a primary battleground. What began as a tussle over trade imbalances has evolved into a strategic clash over technological supremacy. Over the past few years, the United States has tightened its export restrictions, limiting China's access to advanced semiconductor technologies critical for Artificial Intelligence (AI), 5G and supercomputing. Key players like NVIDIA Corporation (NVDA - Free Report) , Micron Technology, Inc. (MU - Free Report) , Intel Corporation (INTC - Free Report) and QUALCOMM Incorporated (QCOM - Free Report) have been caught in the crossfire, facing regulatory and market challenges that jeopardize their growth prospects.
Recent measures, including the U.S. Commerce Department's export controls on advanced AI chips and chipmaking tools, aim to curb China’s technological advancements. While these restrictions align with the U.S. national security objectives, they have disrupted the semiconductor supply chain and stoked economic tensions. In retaliation, China has imposed restrictions on rare earth metals critical for semiconductor production.
The escalating trade war has created a challenging environment for U.S. tech companies reliant on the Chinese market. As we step into 2025, uncertainties surrounding the conflict are poised to affect revenue streams, supply chains and investor sentiment. Here's a closer look at how leading semiconductor players like NVIDIA, Micron, Intel and QUALCOMM could bear the brunt of these challenges.
NVIDIA has been a proponent of the U.S. government’s restrictions throughout the past three years. In 2022, the U.S. government restricted NVIDIA from selling its A100, A100X and H100 integrated circuits to China and Russia. In 2023, the United States imposed new restrictions on selling two AI chips — A800 and H800 — specifically created for the Chinese market. This year, the U.S. government restricted the export of NVIDIA's advanced A100 and H100 GPUs to China, a key market for AI development.
The U.S. government is continuing its efforts toward restricting China from getting its hands on cutting-edge technologies that can strengthen its military. These kinds of restrictions are going to hurt NVIDIA’s business in China with a negative impact on its top line, margin and cash slows further jeopardizing its ability to support existing customers and complete the development of certain products timely.
NVIDIA Corporation Price and Consensus
NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote
Micron Technology had found itself in the middle of this tug-of-war long ago. For the company, chip sales in China make up more than 10% of its total revenues. In October 2022, the United States imposed an export ban on certain advanced chips that are used in data centers for AI, data analytics and computing applications with the intention of stopping these chips from getting into Chinese hands.
Later in 2023, the Cyberspace Administration of China imposed a restriction on Micron on selling its products in key domestic industries on national security concerns. Tit-for-tat actions like these have the potential to jeopardize the company’s prospects, which are already afflicted by the weak demand for its memory chips. Moreover, the memory chip market’s cyclical nature, combined with these geopolitical tensions, could exacerbate its financial volatility in 2025.
Micron Technology, Inc. Price and Consensus
Micron Technology, Inc. price-consensus-chart | Micron Technology, Inc. Quote
Intel’s total revenues experienced a whopping 27% contribution from its Chinese customers in 2023. The company faces unique challenges due to its reliance on both China for manufacturing and the United States for research & development.
China’s latest stance of replacing U.S.-made chips with domestic alternatives has become a concern for Intel. The country’s latest decision to phase out foreign chips from its major telecom networks by 2027, coupled with the U.S. government’s directive to revoke Intel’s chip export licenses to the Chinese telecommunication giant Huawei, has a big potential to affect the company’s top line.
Although Intel has been heavily investing in its foundry business to reduce reliance on Chinese manufacturing, these efforts may take years to bear fruit. The company’s struggles to regain market leadership in the face of geopolitical headwinds could further pressure its bottom line and stock performance in 2025.
Intel Corporation Price and Consensus
Intel Corporation price-consensus-chart | Intel Corporation Quote
QUALCOMM has a lot to lose from the US-China trade war as a major part of its business comes from China. The company has also set up multiple manufacturing facilities in China. In early 2024, Qualcomm faced the same restrictions as Intel where the U.S. government revoked its chip export license for certain technologies to Huawei.
Retaliation from the Chinese trade associations and government can worsen QCOM’s situation. The Chinese government has already put policies, such as the Made in China 2025 initiative aiming for 70% semiconductor self-sufficiency by 2025. These policies can enable QUALCOMM’s existing customers to develop their own chipsets .
QUALCOMM Incorporated Price and Consensus
QUALCOMM Incorporated price-consensus-chart | QUALCOMM Incorporated Quote
Conclusion
The escalating US-China tech war presents a formidable challenge for U.S. semiconductor companies like NVIDIA, Micron, Intel and Qualcomm. These companies are not only grappling with the immediate effects of export restrictions and retaliatory measures but also facing long-term structural shifts in global supply chains and competitive dynamics.
Investors should exercise caution and closely monitor developments in the trade conflict as these could significantly impact the semiconductor industry’s growth trajectory in 2025. While U.S. tech stocks have historically been robust performers, the geopolitical landscape could bring volatility that warrants careful portfolio positioning.
At present, NVIDIA and QUALCOMM each carry a Zacks Rank #2 (Buy) while Micron and Intel each have a Zaks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.