Why Intel Shares Are Falling Tuesday

Intel Corporation INTC shares are trading lower by 3.8% to $35.16 Tuesday morning. Shares of several semiconductor stocks are trading lower after the Biden administration said it plans to halt advanced AI chip shipments to China.

What Happened?

Per Reuters, the U.S. government introduced new rules to prevent China from using U.S. AI technology for military purposes. These rules restrict chip shipments to China, Iran, and Russia and blacklist two Chinese chipmakers.

The goal is to limit access to chips that could enhance China's military capabilities without harming its economy, according to Commerce Department Secretary Gina Raimondo.

See Also: Why Nokia Stock Hit A New 52-Week Low Today

What Else?

Companies like Intel often have a substantial portion of their revenue coming from international markets, including China. This is because China is one of the largest consumers of semiconductor products.

Given a portion of Intel's revenue is tied to the Chinese market, any disruptions or restrictions in that market can directly affect its financial performance.

Investors often assess the long-term implications of government policies and decisions. If the halt in chip shipments to China signals a more significant shift in U.S.-China trade relations, investors might worry about the long-term consequences on Intel's business.

This uncertainty can lead to volatility in the company's stock price.

According to data from Benzinga Pro, INTC has a 52-week high of $40.07 and a 52-week low of $24.73.