$NVIDIA(NVDA.US) The trade war has escalated to this point, and H20 has become another battleground. According to the announcement, on April 9th, a week ago, the U.S. government required Nvidia to obtain an export license for H20.

By April 14th, the same day Nvidia announced plans to build a $500 billion AI infrastructure in the U.S. with manufacturers, the government further informed Nvidia that the license requirement would remain indefinitely.

The company is preparing to recognize potential losses of up to $5.5 billion in inventory and purchase agreements. Nvidia's Q1 2026 earnings report covers the period up to April 27, 2025, meaning that from April 15th to April 27th, it would consume $14 billion in sales (assuming a 60% gross margin, these inventories—or cost of sales—roughly correspond to $13-14 billion in revenues).

For comparison, Nvidia's last-quarter earnings showed $5.5 billion in revenue from China and $5.9 billion from Singapore.

While conservative accounting practices by Nvidia cannot be ruled out, if the trade war intensifies further, AI chips have already been weaponized, becoming collateral damage in the frontlines of the dispute.

From a valuation perspective, assuming zero revenue from China and no absorption by other regions (as seen before with inventory redirected elsewhere, avoiding write-downs), Nvidia's stock price could fall below $100. If further scrutiny is applied to Singaporean end-users, risks could escalate.

However, in the second half of the year, with the B-series shipments starting, if production and delivery proceed smoothly, the lost revenue from China could be offset by other regions or clients. If the stock price rebounds to a neutral expectation, it could potentially reach around $160. The company's long-term competitiveness remains unaffected, so the long-term outlook is stable.