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Nvidia (NVDA) shares fell sharply on April 16, closing down 6.9%, after the company disclosed new U.S. export restrictions targeting its H20 chip and other high-performance circuits. In an 8-K filing, Nvidia revealed that the U.S. government has implemented additional licensing requirements for shipments of these products to China and Chinese-headquartered companies.
As a result, Nvidia expects to record up to $5.5 billion in charges for the April quarter. This hefty write-down suggests the company isn’t confident about securing licenses for continued shipments quickly.
China Exposure and Regulatory Risks Weigh on Outlook
Although this isn’t a full ban, the licensing requirement poses a near-term headwind. Nvidia hasn’t specified how much of its China-related revenue is at risk, but the market isn’t taking it lightly. For context, Nvidia generated $17.1 billion in revenue from China in its fiscal 2025, accounting for about 13.1% of total annual sales based on customer billing locations. While that’s a meaningful chunk, it’s also important to note that Nvidia has already adapted to export controls in the past.
The company launched modified chips tailored to meet prior U.S. regulatory standards, and its data center revenue from China still grew in fiscal 2025. However, that market remains highly competitive, and the possibility of retaliatory measures from the Chinese government or further restrictions on Nvidia or its suppliers adds a layer of uncertainty.
Nvidia’s Fundamentals Remain Solid
Still, these challenges will unlikely shake Nvidia’s core business. The company delivered a solid $130.5 billion in revenue in fiscal 2025 (FY25), more than double the previous year. The key driver behind this growth was its data center segment, which surged to $115.2 billion in revenue on the back of solid demand for its artificial intelligence (AI)-focused GPUs.
The momentum in its data center business looks solid and will likely continue supporting its top and bottom lines. Nvidia’s newly launched Blackwell platform, which succeeds the already-successful Hopper architecture, is breaking records with its rapid adoption. In just one quarter, Blackwell brought in $11 billion in sales. The platform is engineered for next-gen AI workloads and dramatically improves efficiency, slashing inference costs by up to 20 times versus its predecessor while boosting performance.
Despite new low-cost entrants like DeepSeek trying to compete, demand for Nvidia’s high-end chips remains extremely strong. The global buildout of AI infrastructure continues to rely heavily on Nvidia’s full-stack solutions, including hardware, software, and networking capabilities.
Major tech companies are all-in on Nvidia’s AI technologies. Cloud giants are rolling out Nvidia’s GB200 systems, and spending from large internet firms has tripled. This trend strengthens the expectation that Nvidia’s data center business will stay on a solid growth trajectory through FY26 and beyond.
Beyond the data center business, Nvidia is expanding into new segments. Its technology is increasingly used in autonomous driving, robotics, industrial automation, and healthcare. The automotive segment alone brought in a record $1.7 billion in FY25, up 55% year-over-year. The gaming business, which had previously seen some weakness, is also on track to rebound thanks to next-gen GPUs that feature advanced AI graphics. Enterprise AI and professional visualization tools are also gaining adoption, especially in sectors like biotech, where Nvidia’s platforms are helping power drug discovery and genomic research.
NVDA Stock: Strong Outlook and Analyst Confidence Point to Recovery
Looking ahead, Nvidia expects $43 billion in revenue for the first quarter of fiscal 2026, a 65% increase year-over-year, with data center demand continuing to anchor its performance.
Despite recent setbacks, Wall Street hasn’t lost faith in NVDA stock. Although Nvidia stock has pulled back roughly 33% from its 52-week high, analysts maintain a bullish stance. Their average price target is $173.47, indicating a meaningful upside of about 73% from current levels.
The recent correction in Nvidia stock could represent a buying opportunity for long-term investors. Nvidia’s AI leadership, diversified revenue streams, and robust financials keep it well-positioned to weather short-term turbulence and continue delivering solid growth.
