NVIDIA (Nasdaq: NVDA) shares are down around 2% at market open. That drop shouldn’t come as a major surprise as the Nasdaq Composite is down as well, the index opened down 1.25%
Beyond the broader market drop, there is news moving NVIDIA’s stock today. Let’s look at some of the major news NVIDIA investors need to pay attention to today.
New Bipartisan Bill Could Hurt NVIDIA
A new bipartisan bill coming to Congress aims to track AI chips after their sale to avoid smuggling to China. The bill was reported by Reuters this morning. NVIDIA recently sank after new export controls on its H20 chips designed for the Chinese market forced the company to take a $5.5 billion write-down.
However, while NVIDIA chips cannot be sold directly to China, the level of sales into regions like Singapore has raised some eyebrows. Its believed companies like DeepSeek have smuggled significant volumes of H100 chips into the country for training large clusters.
Overall, this crackdown could put further pressure on NVIDIA’s results in both this and future fiscal years. It looks like the future is increasingly headed to China using domestic chips from Huawei, while the rest of the world mostly relies on NVIDIA’s chips.
What’s NVIDIA’s Worst Case Scenario?
Goldman Sachs released a note yesterday evaluating NVIDIA’s sensitivity to datacenter cuts. They found that a “worst-case” scenario involves hyperscalers reducing their data center spend and revenue from China going to zero. In this scenario, the company believes NVIDIA could see $9.8 billion less in revenue and $.40 less in EPS estimates this year. Even with this worst-case scenario analysis, Goldman Sachs maintains a $150 price target and rates NVIDIA as overweight.
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