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Nvidia (NVDA+0.54%) stock continues to fall after the company reported that it would take a $5.5 billion hit due to export controls implemented by the Trump administration. After Thursday’s stock drop, Nvidia has lost more than $250 billion in market cap value since Tuesday.
The chipmaker’s stock fell by as much as 4% on Thursday after plunging 7% the day before. Nvidia remains the third-largest U.S. company by market cap.
On Tuesday night, the company announced the $5.5 billion charge after the U.S. government moved to block exports of its H20 AI chips to China, citing national security risks tied to their potential use. The chips were developed to comply with Biden-era restrictions and had become a key product for Nvidia in China.
Jefferies (JEF+2.36%) analysts said in a Wednesday note that the H20 ban was expected — but that the size of it wasn’t.
On Thursday, Stifel (SF+3.26%) analysts said they maintain confidence in Nvidia’s long-term growth, even amid these Trump-imposed restrictions. While short-term volatility is a possibility, the analysts said the company’s overall growth trajectory is strong and reliable.
Analysts for the investment banking company added that the situation underscores the current global trade war policies and the effect they have on the tech industry. Dutch semiconductor company ASML (ASML+1.37%) reported first-quarter sales slightly below forecasts and flagged the “greater uncertainty” due to trade tensions, warning that new tariffs and restrictions could weigh on its outlook for this year — and next.
Stifel analysts noted that Nvidia’s decision to take such a large charge indicates a possible lack of confidence that the necessary export licenses will be granted by the current presidential administration or that no further regulations will be imposed. Still, analysts upheld their “buy” rating and a price target of $180.00 for the company.
According to InvestingPro data, Nvidia maintains a perfect Piotroski Score of 9, indicating exceptional financial strength.
Meanwhile, the New York Times (NYT+0.29%) reported that Nvidia CEO Jensen Huang went to Beijing to meet with Chinese trade officials. According to state media, Huang emphasized his company’s commitment to the foreign market, saying the company would “spare no effort” to build compliant products and “unswervingly serve the Chinese market.”
But there could be trouble for Huang back home: The House Select Committee on the Chinese Communist Party has launched an investigation into Nvidia’s business in Asia, focusing on whether the company violated export rules, particularly in relation to the Chinese AI startup DeepSeek.
Wedbush Securities said in a note Thursday morning that the chip ban was the “first shots fired” in a potential trade war and said that Nvidia and other U.S. tech companies are “caught in the eye of this Category 5 storm.”