What are the long‑term implications for Nvidia's and AMD's growth strategies in Asia-Pacific markets?

Long‑term outlook

The Chinese warning signals a regulatory head‑wind that could curb the near‑term upside of both Nvidia’s H20‑class GPUs and AMD’s next‑gen CPUs/GPUs in the world’s largest semiconductor market. Even though Nvidia has just secured clearance to ship again, the “refrain‑from‑using” advisory suggests that Chinese OEMs may keep inventory on the sidelines or source alternative, domestically‑produced silicon. For AMD, which still lacks a formal clearance, the same advisory compounds the risk that its products will never achieve a meaningful foothold in China until Beijing’s policy stance softens. In the broader Asia‑Pacific (APAC) region, the loss of China’s demand – which historically accounts for >30 % of total revenue for both firms – will force each company to lean more heavily on growth in Japan, South Korea, Taiwan, and the fast‑growing “Emerging‑APAC” markets (India, Southeast Asia).

Trading implications

Fundamentals: Expect a slower top‑line trajectory for FY25‑26 as the China pipeline is delayed. Nvidia’s guidance will likely be revised downward for its data‑center and AI‑driven revenue, while AMD’s forecast for “China‑free” growth will be more modest, especially for its Ryzen and EPYC lines. Analysts should price‑discount the China exposure component (≈ 15‑20 % of projected APAC growth) until there is clear evidence of policy reversal or a new supply‑chain partnership with Chinese fabs.

Technical: Both NVDA and AMD shares have been testing the 2‑month lows (NVDA ~ $150, AMD ~ $85) and are still in a down‑trend channel. A break above the 20‑day EMA (NVDA ≈ $165, AMD ≈ $90) with volume confirmation could signal a short‑cover rally driven by any positive regulatory news. Until then, the risk‑reward favours a short‑to‑neutral stance – consider a modest short position or a protective put, especially on NVDA where the downside bias is steeper (‑45 sentiment).

Actionable strategy

1. Short‑term – Keep a defensive bias on NVDA and AMD. Use tight‑‑stop‑loss orders around the 20‑day EMA to limit upside risk if the Chinese stance eases unexpectedly.
   
2. Medium‑term – Re‑allocate exposure to non‑China APAC growth catalysts: Nvidia’s AI‑accelerator roadmap (GH200, DGX) and AMD’s partnership with TSMC for advanced‑node CPUs/GPUs. Consider long positions in related regional peers (e.g., Taiwan’s TSMC, Japan’s Sony) that will benefit from the same AI‑driven demand shift.
   
3. Long‑term – Monitor policy developments (e.g., any “green‑list” for foreign chips) and supply‑chain diversification signals. A sustained China ban will permanently shrink the growth ceiling for both firms in APAC, making the “China‑free” growth trajectory the new baseline for earnings forecasts.
   

In summary, the Chinese regulatory warning imposes a structural drag on Nvidia’s and AMD’s APAC expansion, prompting a shift toward diversified, non‑China markets and a more cautious, risk‑managed trading stance.