What to know about the international roadblocks facing Nvidia, Applied Materials

Core Insights - Two chip companies are facing international challenges, particularly in the context of U.S. export regulations affecting their ability to sell chips abroad [1] Group 1: Impact of U.S. Export Rules - Applied Materials disclosed a revenue hit of $710 million due to new U.S. export rules, resulting in a 2% decline in shares [2] - The new rules close a workaround that allowed sales to Chinese entities not explicitly named on the entity list, impacting market dynamics [3] - Applied Materials has lower exposure to China at around 27% of revenue, but trades at a 25% valuation discount compared to peers like Lamb Research [4] Group 2: Market Reactions and Future Outlook - The revenue hit from the new rules is less than 2% of Q4 revenue and fiscal 2026 projections, indicating a manageable impact [5] - The real focus for the industry is on memory capital expenditure recovery and ongoing investments from Taiwan Semiconductor Manufacturing Company [5] - A major deal for Nvidia AI chips to the UAE is stalled, with the UAE's promised investments in the U.S. not yet materializing, highlighting the complexities of international chip deals [6][7]