NVIDIA (NVDA, Financials) shares dropped 7.2% to $104.12 as of 12:11 p.m. Eastern on Wednesday, after UBS analyst Timothy Arcuri reaffirmed a Buy rating on the stock with a price target of $185, despite the company disclosing a $5.5 billion reserve linked to new U.S. export restrictions.
NVIDIA said its H20 chips, designed for artificial intelligence applications, now require U.S. export licenses for sales to China, Russia, and other countries subject to arms embargoes. The company booked the $5.5 billion reserve in anticipation of reduced revenue from these changes.
UBS estimated that removing the H20 chip line from financial models could lower earnings per share by roughly $0.20, though the firm has not revised its current projections.
Other analysts offered varied outlooks. Piper Sandler forecast fiscal year 2026 earnings per share at $3.45 and fiscal year 2027 at $5.08. Cantor Fitzgerald maintained a $200 target, Mizuho Securities set a $168 target, and Raymond James cut its target to $150 while maintaining a Strong Buy rating.
Arcuri said the licensing hurdle could serve as a “clearing event,” noting NVIDIA’s plan to invest $500 billion in U.S. AI infrastructure over the next four years. The initiative may address national security concerns surrounding advanced AI technology exports.
Despite regulatory challenges, analysts continue to support NVIDIA’s long-term strategy centered on Blackwell GPU development and AI market expansion.
