Nvidia stands to lose billions, thanks to new Trump policy originally appeared on TheStreet.
Nvidia (NVDA) has been in full focus since it reported impressive Q1 earnings, but that doesn’t mean the chipmaker isn’t facing some significant problems.
For weeks, investors waited patiently to learn how the artificial intelligence (AI) leader had fared during the year’s turbulent first quarter. After watching NVDA stock battle volatile market conditions for months, some experts raised questions as to its financial prospects.
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Nvidia reported overall mixed earnings for Q1, topping Wall Street estimates on several key metrics but coming up short in other areas. However, the consensus among analysts seems to be that the results are encouraging enough for investors to proceed with optimism that the chipmaker’s growth will continue.
That said, the company recently revealed another important update, one that highlights a potential problem for both its business and the broader chipmaking industry.
Since the launch of ChatGPT in 2022, the AI market has grown quickly, and many investors have zeroed in on Nvidia as the undisputed leader. The company has benefited significantly from this, rising steadily as global demand for its graphics processing units (GPUs) has trended upward, despite their high prices.
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However, in January 2025, the rise of a Chinese AI startup called DeepSeek triggered a massive chip stock selloff when the company released an AI model built on less advanced Nvidia chips. While NVDA stock ultimately recovered, this development called its growth prospects into question.
Nvidia’s recent earnings report likely assuaged the fears of some investors, but it also uncovered something concerning. In a statement on these fiscal results, the company revealed that on April 9, it learned the U.S. government would require a license to export its H20 chip to China.
“As a result of these new requirements, NVIDIA incurred a $4.5 billion charge in the first quarter of fiscal 2026 associated with H20 excess inventory and purchase obligations as the demand for H20 diminished,” Nvidia states. “Sales of H20 products were $4.6 billion for the first quarter of fiscal 2026 prior to the new export licensing requirements.”
The company also shared that due to this new policy, it had been rendered unable to ship an additional $2.5 billion worth of H20 products during Q1. On top of that, Nvidia said it expects the H20 licensing requirement to result in an $8 billion revenue hit during Q2, which it projects to be roughly $45 billion.
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