What’s Behind Nvidia and AMD’s Drop as Intel Shares Rise?

Semiconductor stocks are experiencing mixed movements in premarket trading today, with Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD) shares declining while Intel (NASDAQ:INTC) posts gains. The divergent performance comes amid significant developments, including an unusual revenue-sharing agreement between Nvidia, AMD, and the U.S. government regarding China chip sales, and Intel’s CEO preparing for a high-stakes White House meeting.

Unusual Revenue-Sharing Deal Creates Market Uncertainty for Nvidia and AMD

Nvidia and AMD have agreed to pay the U.S. government 15% of their revenue from advanced AI chip sales to China, marking an unprecedented arrangement in the semiconductor industry. The deal applies to chips like Nvidia’s H20 and AMD’s MI308, which are specifically designed for artificial intelligence applications in the Chinese market. This agreement comes as a condition for obtaining export licenses after the Trump administration initially halted H20 chip sales to China in April 2025.

The revenue-sharing arrangement represents a double-edged sword for both companies. While it allows them to maintain access to the lucrative Chinese market – which accounts for 13% of Nvidia’s total sales ($17 billion) and 24% of AMD’s revenue ($6.2 billion) – it also creates significant financial and strategic risks. The 15% cut represents a substantial reduction in profit margins, and more concerning for investors is the precedent it sets for government intervention in private business operations.

Market analysts are expressing concern about the long-term implications of this deal. The arrangement could signal that the government may impose similar revenue-sharing requirements in the future or increase the percentage at will. This creates an unpredictable business environment where companies must factor in potential government revenue claims when planning their China operations, adding a new layer of geopolitical risk to their business models.

The unusual nature of this deal has prompted criticism from policy experts who question whether selling these chips to China poses a national security risk. If the chips are deemed safe enough to sell, critics argue, why impose what amounts to a penalty tax?

This policy inconsistency adds to market uncertainty about the future direction of U.S.-China tech trade relations.

Intel CEO’s White House Visit Signals Potential Turnaround Opportunity (SO:FTCE11B)

Intel’s stock is bucking the downward trend in premarket trading, gaining 1.50% to $20.25, as investors react positively to news that CEO Lip-Bu Tan will visit the White House on Monday. This meeting comes after President Trump called for Tan’s removal last week, citing concerns over the CEO’s ties to companies associated with the Chinese military. The visit represents a crucial opportunity for Tan to address these concerns and potentially strengthen Intel’s relationship with the current administration.

The controversy surrounding Tan stems from his previous role at Cadence Design Systems (NASDAQ:CDNS), which recently agreed to plead guilty and pay over $140 million to settle a U.S. lawsuit over selling chip design products to a Chinese military university.

Additionally, Tan’s venture capital firm has investments in Chinese companies, raising questions about potential conflicts of interest in his current role leading America’s largest semiconductor manufacturer.

Despite these challenges, the White House meeting could prove beneficial for Intel’s long-term prospects. The company has been struggling with financial difficulties and seeking to restore its former chipmaking dominance under Tan’s leadership since he took over in March 2025.

A successful meeting could position Intel as a preferred domestic partner for government semiconductor initiatives and potentially lead to increased federal support or contracts.

The market’s positive reaction to the White House visit news suggests investors view this as an opportunity for Intel to differentiate itself from competitors who are now subject to the China revenue-sharing arrangement. By addressing the administration’s concerns directly, Intel could potentially avoid similar penalties while strengthening its position as America’s primary domestic chip manufacturer, which could prove valuable in an era of increased focus on semiconductor supply chain security.

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