Nvidia’s $5.5 Billion China Charge Triggers Price Target Cuts, But No Downgrades

New export restrictions on Nvidia’s H20 AI chip led to a sweeping inventory charge and multiple price target cuts — but analysts across the Street remain largely optimistic about the company’s broader AI positioning.

On Tuesday, the AI-bellweather disclosed that it anticipates up to $5.5 billion in first-quarter charges after new U.S. export restrictions blocked sales of its H20 AI chips to China and other regions.

The charge relates to inventory, purchase commitments, and reserves tied to the H20, a data center GPU that was previously designed to comply with earlier U.S. export controls. 

However, new licensing requirements, disclosed to the company by the U.S. government on April 9, now bar H20 shipments to China and appear to apply for the “indefinite future,” according to Nvidia.

Analysts responded by trimming price targets. Piper Sandler cut its price target on Nvidia to $150 from $175, citing the surprise nature of the charge and the reduced outlook for data center products shipped to China. 

Raymond James also lowered its target to $150 from $170, noting that the charge implies Nvidia does not expect to secure a license going forward. 

Both firms maintained bullish ratings — ‘Overweight’ and ‘Strong Buy,’ respectively.

Evercore ISI kept its ‘Outperform’ rating and a $190 target, suggesting the current disruption could follow the pattern of 2022, when earnings estimates were initially cut but recovered within 12 months.

Citi, which had previously de-risked its model for China exposure, reiterated its ‘Buy’ rating and $150 target. 

While Citi maintained its AI unit estimates, it warned the H20 news could pressure Nvidia’s July-quarter guide, which currently assumes about a 10% contribution from China data center sales.

Overall, analysts remain confident in global AI demand, especially from U.S. hyperscalers, offsetting any sustained weakness in China. 

Nvidia's stock plummeted by over 6% in pre-market trading on Wednesday. 

Its shares are down 23% in 2025, but have gained more than 22% over the past year. 

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