Nvidia stock continued its slide Thursday, falling nearly 3% and extending a sharp two-day selloff triggered by new U.S. government export restrictions targeting its AI chips made for the Chinese market. The decline comes after Nvidia disclosed in a regulatory filing this week that it expects a $5.5 billion hit to Q1 revenue due to the abrupt halt in shipments of its H20 chips.
The chipmaker’s market capitalization has now shed roughly $266 billion, falling to $2.47 trillion, according to Bloomberg data. This marks one of the steepest market cap losses in the tech sector this year and comes at a time of heightened trade tension and growing scrutiny of AI hardware exports.
Wall Street Reactions: $10B–$16B in Lost Revenue Expected
The market reaction has been swift, with analysts slashing revenue forecasts. JPMorgan’s Harlan Sur projected that Nvidia’s full-year data center revenue and EPS could decline 8% to 10%, translating to as much as $16 billion in lost sales. Jefferies analyst Blayne Curtis offered a slightly less severe estimate, pegging the impact at around $10 billion.
These downgrades come just days after reports suggested the Trump administration had softened its stance on Nvidia’s exports, following a high-profile dinner between CEO Jensen Huang and President Trump at Mar-a-Lago. However, the Commerce Department surprised markets this week by proceeding with new trade restrictions and launching a Section 232 investigation into chip imports, citing national security concerns.
Nvidia’s China Strategy in Turmoil
The U.S. restrictions specifically affect the H20 chip, a product Nvidia tailored to comply with prior trade limits but which officials now believe may still pose security and strategic risks. The ban disrupts a significant portion of Nvidia’s China business, just as the company sought to navigate an increasingly bifurcated global semiconductor market.
Despite the setback, Nvidia remains committed to bolstering its domestic operations, with plans to invest up to $500 billion in U.S.-based AI infrastructure over the next four years. The announcement underscores a broader push across the tech industry to re-shore production and mitigate geopolitical risk amid evolving trade policy.
Sector-Wide Impact
Nvidia’s pain was felt across the semiconductor sector. Advanced Micro Devices (AMD) dropped nearly 1%, Broadcom (AVGO) fell 2.1%, and Intel (INTC) declined 1.6%. The broader Philadelphia Semiconductor Index (SOX) slipped 0.64%, extending its weekly losses.
