Analysts look down the back of the sofa
Nvidia’s stock has been in freefall, shedding more than $250 billion in market cap this week after it revealed a $5.5 billion charge tied to US export restrictions on its H20 AI chips to China.
According to Investopedia Morgan Stanley analysts slashed their revenue forecasts, warning that the new curbs are “more disruptive” than anticipated, with an expected 8 to 9 per cent hit to Nvidia’s data centre revenues over the next few quarters .
The Street quoted Wedbush Securities analyst Dan Ives saying the current mess is a “strategic blow” for Nvidia, noting that the company is “caught in the eye of this Category 5 storm” as US-China tensions escalate .
South China Morning Post talked to Morningstar analyst Brian Colello who painted a grim picture, stating that Nvidia’s China business is likely to “fall to nearly zero,” down from about 10 per cent of total revenue last year .
The Economic Times talked to Nori Chiou, investment director at White Oak Capital Partners who highlighted the unintended consequences of the export restrictions, suggesting that US regulators are “effectively pushing Nvidia’s Chinese customers toward Huawei’s AI chips,” potentially accelerating the development of domestic alternatives .
Despite the turmoil, some analysts remain cautiously optimistic. Bank of America reiterated a $160 price target, calling Nvidia’s stock “compelling” given strong global demand for its chips.
Meanwhile, the New York Times 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.”
