Nvidia (NVDA) stock just took a body blow. The AI chip titan sank nearly 7% after revealing it expects to lose $5.5 billion in revenue—thanks to fresh U.S. export restrictions on its H20 chips bound for China. These weren’t just any chips. They were custom-built to dodge previous rules. Now they’re stuck in limbo.
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The new licensing requirements effectively block Nvidia from shipping its H20 products without prior government approval. And that, in Nvidia’s own words, “significantly reduces our visibility into future sales.”
New Tariffs Pull the Plug on H20 Strategy
Let’s rewind. Nvidia had tailored its H20 AI chips for the Chinese market in response to earlier trade curbs. But that plan just got shredded. The U.S. government hit China with tariffs as high as 245% on a range of imports, including advanced semiconductors.
This time, the rules didn’t just tighten—they slammed the door. The licensing process is now indefinite, leaving Nvidia with inventory it can’t legally ship.
And Nvidia’s not alone. AMD also warned that it expects an $800 million revenue hit tied to similar export issues.
Markets Dump Tech as Trade Tensions Escalate
The ripple effects were immediate. The Nasdaq tumbled over 3% as chip stocks cratered across the board. Nvidia’s slide dragged down peers like ASML (ASML) and TSMC (TSM). Investors weren’t just reacting to one company—they were recalibrating the whole AI supply chain.
Over in D.C., Fed Chair Jerome Powell fanned the flames further. Powell warned of “stagflation-like dynamics” triggered by tariffs—where growth slows and inflation heats up at the same time.
Nvidia Scrambles to Reset Its Strategy
Caught in the crossfire, Nvidia’s now pivoting hard. The company said it plans to invest $500 billion into building out U.S.-based AI supercomputing facilities in states like Arizona and Texas. The goal? Reduce dependency on China and keep the AI train running—even if it has to change tracks.
But Wall Street is wary. Nvidia stock has lost about 20% year-to-date. Key price levels to watch: $96 as a short-term floor, $130 as resistance.
The bottom line? Nvidia’s in a strategy reset, not a freefall. But in a tariff-choked trade landscape, even the most powerful chipmaker is struggling to read the next move on the board.
Is NVDA Stock a Buy, Sell, or Hold?
Even with all the market turbulence, analysts are standing firm in their confidence around Nvidia’s future. On TipRanks, NVDA stock commands a Strong Buy consensus rating based on 37 Buys and five Hold ratings. Also, the average Nvidia price target of $170.92 implies 63.6% upside potential from current levels.