$NVIDIA(NVDA.US) The trade war has escalated to this extent, and H20 has become a focal point for both sides. From the content of the announcement, on April 9th, just a week ago, the U.S. government required NVIDIA to obtain a license before exporting H20.

On April 14th, the same day NVIDIA announced plans to co-build a $500 billion AI infrastructure in the U.S. with manufacturers, they were informed that the license requirement would not have a set date and would remain in effect indefinitely.

The company is preparing to recognize potential inventory and purchase agreement losses that could reach up to $5.5 billion. NVIDIA's Q1 2026 financial report is for the period ending April 27, 2025, meaning that from April 15 to April 27, they would need to account for $14 billion in sales (assuming a 60% gross margin, this inventory roughly corresponds to $13-14 billion).

In comparison, according to NVIDIA's financial report, the previous quarter, the China region contributed $5.5 billion in revenue, while Singapore contributed $5.9 billion.

While it cannot be ruled out that NVIDIA may be conservative in their accounting treatment, if the trade war escalates further, AI chips will already be weaponized and will become collateral damage in the front-line disputes.

From a valuation perspective, assuming no business in China and that foreign markets cannot absorb the inventory (there have been instances of selling stockpiles to other regions, thus no need to recognize inventory), NVIDIA's stock price could fall below $100. If further investigation into Singapore customers' end users is conducted, the risks could increase further.

However, in the second half of the year, as the B series begins to ship, if the stock price rebounds to neutral expectations, it could reach around $160; the company's long-term competitiveness is not affected by this, so there are no significant long-term issues.