Nvidia’s once meteoric rise has hit a turbulent patch in 2025, as the company grapples with a series of escalating pressures—ranging from export restrictions to looming tariffs—that have rattled investor confidence and sent its stock sliding.
The latest blow came this week when the company revealed it would need a U.S. government license to export its H20 chips to China, essentially blocking access to one of its major markets. The disclosure also included a $5.5 billion chargein Q1 related to canceled H20 orders and supply chain commitments, a stark reversal from its high-flying 2024.
The broader impact? Tariffs are expected on not just semiconductors, but also laptops and desktops, further affecting Nvidia’s core segments—gaming, AI, and enterprise graphics chips. Adding to the headwinds are newly announced AI diffusion controls that will take effect in May, limiting global access to advanced AI chips and requiring new licenses for certain nations.
The market’s response has been swift and sharp. Nvidia’s shares have plunged 24% year-to-date, with more than 6% of that loss occurring in just the last five days. While Nvidia remains a major force in the semiconductor space, its position is increasingly being tested by shifting geopolitical dynamics.
A Growing List of Headwinds
The H20 chip restrictions are just the tip of the iceberg. The move follows revelations that Chinese AI firm DeepSeek used Nvidia’s older chips to train powerful AI models, prompting national security concerns in Washington. In response, the U.S. is tightening controls to prevent advanced AI technologies from being used to bolster China’s military capabilities.
Nvidia will now be forced to absorb the cost of unsold H20 inventory, significantly impacting its Q1 results and potentially weighing on its full-year performance. China represented $17.1 billion in Nvidia’s fiscal 2025 revenue, making it the company’s fourth-largest market after the U.S. ($61.2B), Singapore ($23.6B), and Taiwan ($20.5B).
While Singapore appears to be a major market, Nvidia clarified that the country serves mostly as an invoicing hub, with actual product shipments going to other destinations. In fact, Singapore itself accounted for just 2% of physical sales.
Some Bright Spots Remain
Despite the growing list of challenges, not all is bleak for Nvidia. The company’s new Blackwell chips continue to perform well, with strong demand from tech giants building out AI data centers across the U.S. and Europe. These orders may help offset some of the China-related losses, though they have yet to meaningfully shift market sentiment.
According to BofA analyst Vivek Arya, the H20 restrictions could shave 5% to 8% off Nvidia’s fiscal 2026 revenue, while earnings per share could fall between 6% and 10% as a direct result of the export clampdown.
The Road Ahead
Nvidia’s future now hinges on how swiftly it can pivot away from dependence on China and strengthen its U.S.-based manufacturing and supply chain operations. Its recent commitment to build more AI infrastructure domestically could prove timely, especially as President Trump’s administration intensifies its focus on national security and domestic chip production.
But with multiple geopolitical and regulatory forces converging, 2025 is shaping up to be a stress test for one of the most valuable chipmakers in the world. For investors, the message is clear: volatility is back in the semiconductor space, and Nvidia is at the center of it.
