April 16 - Nvidia (NVDA, Financial) has disclosed a $5.5 billion inventory writedown related to tightened U.S. export curbs on its advanced AI chips bound for China, escalating concerns over the company's long-term exposure in one of its largest overseas markets.
The charge, linked to unsellable H20 chip inventory, follows Washington's recent clampdown on exports of high-end semiconductors amid deepening tech tensions with Beijing. Analysts at Wedbush said the move represents a “clear shot across the bow” from the Trump administration as it reinforces barriers to China's AI development.
While the financial blow is seen as manageable, Wedbush warned that the mounting restrictions represent “massive blockades” for Nvidia's future growth in China, a market that has played a major role in the chipmaker's ascent.
Mizuho analysts estimated Nvidia held around $16 billion in H20 chip orders, with roughly $10 billion already delivered. The $5.5 billion charge likely reflects the remainder of inventory rendered unsellable due to the export ban.
Despite the setback, Mizuho maintained its “Outperform” rating and $168 price target, citing Nvidia's strong AI dominance and future earnings potential, though volatility may remain elevated amid U.S.-China friction.
