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Wall Street Breakfast

Nvidia to take $5.5B hit on H20 chip

Apr 16, 2025
Nvidia faces a hefty $5.5 billion hit after the U.S. government requires a license to export its H20 chip to China. Meanwhile, Vera Bradley struggles with a disappointing rebranding effort, leading to new lows. Harley-Davidson is under pressure from major shareholders demanding a board overhaul and a CEO change. The automotive landscape sees updates with Ford and Rivian, while index futures present a mixed picture ahead of critical economic events.
07:18
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Quick takeaways

  • Nvidia's new export regulations to China necessitate a special license, resulting in a projected $5.5 billion financial hit.
  • Vera Bradley's ongoing struggles with rebranding and e-commerce have led to record low stock prices, raising investor concerns.

Deep dives

Regulatory Challenges for NVIDIA

NVIDIA faces significant regulatory challenges as the U.S. government has mandated that the company obtain a special license to export its H-20 graphic processing units to China indefinitely. This requirement is expected to force NVIDIA to take a charge of $5.5 billion in its upcoming quarterly financial results, leading to a 6% drop in shares during pre-market trading. The H-20 chips were designed to comply with previous export restrictions, which made it surprising that a license is now needed, especially after reports suggested the U.S. was pausing an export ban. Chinese tech companies, such as Alibaba and Tencent, had placed substantial orders for the H-20 chips, amounting to at least $16 billion, before the potential ban on sales in China materialized.

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