Wall Street analysts had a few words of choice for the last upheaval for NvidiaThe country’s regulatory landscape – “disruptive”, “surprise” and “steep”, just to name just a few. Bernstein analysts went so far as to say that “the Trump mat remains fully effect”.
New rules concerning NVIDIA Chinese affairs Surprised by many stakeholders from the company this week. On Tuesday, after Market Close, the company announced that it had been informed that the Trump administration would require a new license for all accelerated flea expeditions in China and a small group of other countries, including Russia.
NVIDIA said it would take a charge of up to 5.5 billion dollars in inventory, purchase commitments and reserves in the first quarter, which ends on April 27.
“Based on our discussions, this is actually a ban,” UBS analysts wrote on Tuesday in a note to investors.
Even analysts who did not want to read the disclosure as a complete prohibition have declared that any license process is likely to be long, so the income of the Nvidia chip H20, that which the company designed specifically to respond to the export restrictions of the Biden era, should be minimal in the planned future.
“This is not a ban; this is a license requirement, but once again, the reduction in stocks suggests that the company is not optimistic about obtaining licenses,” analysts of Morgan Stanley wrote.
At the time of the drafting of this document, the regulations did not appear in the Federal Register or the website of the Ministry of Commerce, so that all of the analysts’ reactions are linked to the disclosure of Nvidia. The actions of the company fell by more than 7% from Tuesday to Wednesday close to the market.
A spokesperson for Nvidia refused to comment.
China chips are big funds for Nvidia
NVIDIA assessed the charges it will likely lead to the first quarter (ending on April 27) at $ 5.5 billion. However, there was no warning regarding the results of the first quarter of the company, which will be announced on May 28. Although sales in China are almost certainly lower than expected, several analysts expect society to always achieve income targets for the first quarter.
“Given the fort H200 chip request Since the launch of Deepseek, we have thought that NVDA could compensate for somewhat lost China H20 income, “BNP Paribas analysts wrote. The same analysts have estimated that the activity of the Chinese data center in Nvidia constitutes 10% to 12% of NVIDIA total income.
UBS suggested that profit per share would drop by 20 cents, and Morgan Stanley analysts expect 8% to 9% of data center income disappears in the short term.
A decrease in current sales in China was already expected.
The restrictions on what the company is authorized to sell to China is not new. Consequently, the company has attempted to reduce its dependence on this market over the past two years. Since the H20 is only relevant for the Chinese market, the excess offer will not affect sales by Nvidia from other chips, wrote Morgan Stanley.
Larger decisions on the road
Since Nvidia chips are the most expensive that exist and buyers continue to queue, price Are less worrying than export restrictions, Morgan Stanley analysts said. Beyond the Chinese market, there are more important potential impacts.
Biden administration Diffusion rules AI are ready to come into force next month – and may have an even more important impact on Nvidia if it is adopted as it is, because they restrict exports to many other countries such as Singapore, Mexico, Malaysia, Water, Israel, Saudi Arabia and India.
Since the White House and Nvidia have demonstrated some cooperation this week, the Trump administration celebrating the company’s announcements around Extended American manufacturingAnalysts converged a theory on what comes afterwards.
“We are optimistic that the obviously good relationship of the company with the government, as Trump tweeted yesterday, will reduce these concerns,” wrote analysts from Morgan Stanley.