NVDA – Daily Chart
The NVDA stock price appears to have found strong buyers around the $100 level but that will be tested on Wednesday after a 6% loss in after hours trading. NVDA is set to open around $105.
Nvidia tumbled in after hours trading after the company said the government will begin requiring a license to export its H20 chips to China, which escalates restrictions that the company has publicly opposed.
The government informed Nvidia on Monday that such a license would be in effect “for the indefinite future”. Nvidia now expects to see a $5.5 billion hit during the fiscal first quarter from “inventory, purchase commitments and related reserves”.
“The US government, or USG, informed NVIDIA Corporation, or the Company, that the USG requires a license for export to China (including Hong Kong and Macau) and D:5 countries, or to companies headquartered or with an ultimate parent therein, of the Company’s H20 integrated circuits,” the statement said.
The H20 is a scaled-down chip that was designed to comply with US export regulations and has been Nvidia’s primary AI GPU available for sale in China after the H100/A100 were banned. The latest move is another blow for Nvidia’s plans to leverage sales and keep its growth valuation that has slipped since the second half of 2024.
Bloomberg News reported in January that the Trump admin was considering the latest step.
Chinese tech companies including Tencent, Alibaba and ByteDance had been scaling up H20 orders ahead of any potential chip regulations. That could start to feed into Nvidia sales over the coming year.
The chipmaker was the leader of a two-year AI-driven rally, which has run out of steam in recent months. Nvidia said on Monday it was planning to build AI servers worth up to $500 billion in the US over the next four years but the company has not escaped further export controls.
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