What is the expected impact of this regulatory cost on the stock prices of NVDA and AMD in the short term?

Fundamental outlook – The 15 % levy on Chinese chip‑sale revenue is a non‑trivial cost for both Nvidia (NVDA) and AMD, whose China exposure accounts for roughly 20 %‑30 % of total revenue for each company. Translating the levy into a straight‑line hit, the extra expense will likely shave 1‑2 % off top‑line growth for the next two quarters, with the impact being slightly higher for AMD (which has a larger share of its sales in China) than for Nvidia. The broader regulatory backdrop (U.S. tariff pressure) adds a negative sentiment bias (‑40 in the source) and suggests investors may price in a modest earnings downgrade, especially if the companies cannot pass the cost on to customers.

Technical & short‑term price action – Both stocks have been trading near recent swing highs (NVDA around $730–$750; AMD around $115–$120) with the 10‑day EMA just below the current price and a modest bearish divergence on the RSI (below 50). The immediate support levels are the recent low‑volume pull‑back zones (NVDA near $680–$690, AMD near $105–$108). A break below these zones could trigger short‑term selling pressure as traders adjust for the new cost base. Conversely, a bounce off the 20‑day SMA could temporarily offset the negative news as investors reassess the magnitude of the cost.

Actionable implication – Expect a modest, short‑term downside bias for both stocks, with the risk of a 3‑5 % dip in the next 1‑2 weeks as earnings estimates are revised downward. Traders could watch for a break of the near‑term support levels as a potential trigger for further downside, while any rebound above the 20‑day SMA may provide a short‑term buying opportunity on a dip, given the companies’ strong cash flow and the long‑term growth narrative. Risk‑management‑tight stop‑losses just below the identified support zones would help mitigate the regulatory‑driven volatility.