Chip Stocks Drop AMD, Nvidia, and Intel Sink After China Restricts Rare Earth Exports

China's intention to restrict rare earth element exports hurt chip markets . Investors worried about supply issues drove AMD (AMD, Financials) down 7.7%, Nvidia (NVDA, Financials) down 4.9%, and Intel (INTC ,Financials) down 3.8%.

China, which processes most rare earths, needs government approval to ship semiconductors. Beijing's action is part of a bigger attempt to control key commodities that power electronics and electric cars.

With the new export review process, chipmakers who employ Chinese suppliers may have to wait longer and pay more. This uncertainty damaged the semiconductor industry, even though analysts said it was more about short-term supply difficulties than reducing demand.

Even with Friday's drop, all three stocks are doing well this year. AMD's AI and data center chip segment has boosted its stock price 78% this year. Nvidia is the AI hardware market leader in 2025, up 36%. However, Intel has risen 81% as it expands its U.S. manufacturing and foundry services

Nvidia remains the top pick, say analysts. Nvidia has a Strong Buy consensus and an average price target of $219.86, giving it a 20% probability of rising. AMD is a Moderate Buy with an 11% upside, while Intel is Neutral with a 23% downside.

If China's export curbs remain unchanged, investors will examine how global chipmakers modify their supply chains and whether the U.S. or other countries increase rare earth output to compensate.