Nvidia H20 restrictions could limit guidance beat, says Citi

Citi says Nvidia (NVDA) shares traded down 6% last night following the company announcing it will take $5.5B in charges after the U.S. government notified the company on April 9 license requirements for exports to China of its H20 artificial intelligence chip. Nvidia went on to point out the U.S. government’s decision will be in effect for the indefinite future, the analyst tells investors in a research note. Citi keeps its Nvidia artificial intelligence units and sales estimates intact as it previously de-risked sales estimates amid the expectations that all China AI GPUs will be eventually subject to restriction. However, it acknowledges the news could impact Nvidia’s July quarter guide’s ability to beat Street estimates comfortably, which it thinks currently bake in 10% China contribution to data center sales. Citi keeps a Buy rating on the shares with a $150 price target