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U.S. export restrictions of powerful chips to China hurt now, but should prove bullish long term

NVIDIA DRIVE Thor, the company’s next-generation centralized computer for autonomous and assisted driving and in-car infotainment, is shown in a handout image obtained September 20, 2022.

Nvidia | via Reuters

It’s understandable why the US felt the need to act swiftly to keep powerful semiconductors out of the hands of the Chinese government. It’s better to make a move from a position of strength before it’s too late. However, as shareholders of chip stocks, it still hurts. As you may recall, Club holding Nvidia (NVDA) was hit particularly hard about 2½-months ago when the Biden administration restricted exports of the most advanced American-made chips to China for fear they would be co-opted for military use.

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