Chipmaking giant Nvidia closed Monday's session 2.5% in the red after China opened an antitrust probe into the company amid escalating trade tensions between Beijing and Washington over AI dominance.
The investigation of Nvidia suspects the company of breaking anti-monopoly law and is also set to probe its 2020 acquisition of Mellanox, which was approved by China's State Administration for Market Regulation under the condition that the chipmaker avoid discriminating against Chinese companies.
An Nvidia spokesperson said on Monday: "We work hard to provide the best products we can in every region and honour our commitments everywhere we do business. We are happy to answer any questions regulators may have about our business."
The investigation comes a week after president Joe Biden's administration launched semiconductor export restrictions, aimed at limiting China's access to US chips.
Danni Hewson, head of financial analysis at AJ Bell (AJB.L), said: "It’s another sign of continued tension between the US and China which has put chipmakers up front as potential pawns in what seems to be a game of brinkmanship when it comes to tech development."
Shares in software and cloud company Oracle slid 8% in pre-market trading on Tuesday morning, after it reported second quarter earnings that just missed Wall Street expectations.
Revenue came in at $14.06bn (£11.01bn) in the second quarter, which was just below estimates of $14.12bn. Adjusted earnings per share of $1.47 were also slightly short of consensus expectations of $1.48.
These figures still showed growth on Oracle's fiscal first quarter, in which it posted adjusted revenue of $13.31bn and adjusted earnings of $1.39.
Wolfe Research managing director and head of software research Alex Zukin, told Yahoo Finance: "There's the potential for accelerating growth. There's the potential for better infrastructure and [Oracle Cloud Infrastructure] OCI growth as well [in the next couple of quarters].
"I do think that they just have to keep doing what they're doing, and the stock will continue to work."
E-commerce firm Alibaba was one Chinese stock on the rise on Monday, with New York-listed shares closing the session up more than 7%, after officials signalled a shift in economic policy.
China said it will embrace a "moderately loose" monetary policy and take a "more proactive" approach to fiscal stimulus policy before president-elect Donald Trump's return to the White House.
Other China stocks that rose following these comments included fellow e-commerce company JD.com (JD, 9618.HK), Temu-owner PDD Holdings (PDD), as well as electric vehicle makers Nio (NIO) and Xpeng Inc (XPEV).
Matt Britzman, senior equity analyst at Hargreaves Lansdown (HL.L), said: "The announcement highlighted plans to boost domestic demand and consumer spending, setting the stage for this week’s Central Economic Work Conference to unveil China’s big economic priorities.
"High-growth sectors like tech, consumer goods, and finance led the charge, and the rally wasn’t just local – UK companies with ties to China saw a boost too, proving the ripple effect of good news travels fast."
Another chipmaker in the news on Tuesday was TSMC, which reported 34% year-on-year revenue growth in November to 276 billion new Taiwan dollars (£6.7bn).
This brought revenue from January through to November to a total of 2.6 trillion new Taiwan dollars, which was up nearly 32% on the same period in 2023.
Despite this growth, TSMC Taiwan-listed shares were down nearly 1% in Tuesday's session, while the company's New York-listed shares were down more than 1% in pre-market trading.
TSMC is considered a bellwether of semiconductor industry, as the world's largest contract chipmaker, manufacturing the designs of the likes of Nvidia.
In the UK, shares in international equipment rental company Ashtead were down 9% on Tuesday morning, after it warned on profits.
In its half-year results, Ashtead said: "Principally as a result of local commercial construction market dynamics in the US, we now guide to Group rental revenue growth for the full year in the range of 3-5% and hence, full year profit lower than our previous expectations."
Separately on Tuesday, Ashtead said it was moving its primary listing to the US, in a blow to the UK market. Ashtead said its company is "substantially a US business, reporting in US dollars, with almost all the group's operating profit (98% in FY24) derived from North America, which is also the core growth market for the business."
In terms of its results for the first half, Ashtead posted 2% revenue growth year-on-year at $5.7bn, though profit before tax fell 4% to $1.2bn.
Dan Coatsworth, investment analyst at AJ Bell, said: "It was always a question of ‘when’ not ‘if’ Ashtead would move its main stock listing to the US.
"There is also the Trump factor to consider. He favours American companies doing things for American people. Ashtead is nearly the perfect example but moving its listing to New York is effectively another tick in the box in its favour.
"The next logical move would be to sell its remaining UK operations – they are tiny compared to the US business and offloading them would complete the circle for the pivot to all things Stateside."
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Other companies in the news on Tuesday 10 December:
