Yahoo Finance

Shares of Nvidia, they are down as the company warns of a five and a half billion dollar hit from US curbs on China. The warning dragging down semis and stock futures this morning. Here to break down what we know so far from the filing, we've got Yahoo finances Dan Howley here. Dan, what can we kind of make from what Nvidia did kind of disclose here to investors through the SEC filing?

Yeah, they said they're going to take this 5.5 billion dollar charge on H20 products. Uh that's for inventory purchase commitments and related services. Now, what the government here is saying is that they now need a license to export their H20 chips. Those were basically the chips that they were relying on to be able to sell into the the Chinese market. Now, they had previously tried to build chips that were less powerful than top of the line. Uh those were the A series chips that they had had. The US government had said no, that's those those are still too powerful. Nvidia came back and said, okay, what about these chips, these H20 chips? Uh the H stands for Hopper in this case, and they basically said, uh now, no. And they were making decent money out of China. Let's just look at some of the revenue that they brought in 17.1 billion from China in 2025. That was up from 10.3 billion in 2024 and 5.7 billion in 2023. China is its fourth largest market. That's behind the United States, Singapore and Taiwan. Uh China including Hong Kong. Now, one of the interesting things Nvidia points out in its filings is that Singapore, while it is its second largest market, is really kind of a kind of way station for Nvidia's chips where people purchase them and then they end up in other destinations. So that might be something interesting to look at in the future if the US government is trying to clamp down on any of these chips getting to to China and if perhaps purchasers can bring them from Singapore to China. I think that's one of the things that, you know, is is going to be looked at heavily, especially considering that Taiwan is its third largest market.

Yeah, and I want to get to ASML while we have you, Dan, but super quick here, this is not Nvidia's most powerful chip, right? Does that play into how big of an impact this could have on them?

No. You know, I mean, the the thing is what Jensen Wong has said is that, you know, look, we'll we'll continue to compete in China as long as we can. Uh the idea that they weren't selling the most powerful chip, it's not the most uh uh margin that they would get. Um Blackwell is just now launching and being used. Um Blackwell Ultra is their next generation. Uh so it's not it's not Blackwell, it's not Blackwell Ultra, it's not even the the best Hopper chip that they have. So it's it's a further back version of Hopper or or or kind of call it nerfed version of Hopper. Um but no, it's not nowhere near their most powerful chip.

And I do want to get to ASML. The orders missing estimates, about 60 seconds left. How big of a read through might that have to the other semi names?

I think that's going to be a huge deal. I mean, look, obviously ASML, they build the the equipment that builds chips. Now, you know, there's a ton of factories being put up right now or fabs being put up right now. TSMC obviously talking about investment, Intel talking about investment though they did put some of their investment on hold. Uh so I think when you look at something like this, it's, okay, what does this mean for obviously the future of chip building and future of demand? Uh and I think, you know, couple that with what's going on with China here. I think it's going to be a difficult report for for Nvidia when they do eventually announce their earnings. They're the latest basically when it comes to Big Tech. Um I think the end of May. Uh and so it could be a drag on on their forward guidance if they even issue it considering all the tariff situation going on.

All right, Dan, thank you so much. Really appreciate it.