Street View: Limits on Nvidia's high-end AI chips concerning but not surprising

Nvidia NVDA.O on Tuesday said it would take $5.5 billion in charges after the U.S. government limited exports of its high-end H20 artificial intelligence chip to China, a key market for one of its most popular chips

Shares down 5.32% to $106.23 in premarket trade

INVENTORY WRITEDOWN A 'CAUTIONARY SIGNAL'

Morgan Stanley ("overweight," PT: $162) says while the limitations on H20 chips was not a surprise, the inventory write-down suggests Nvidia is not optimistic about being granted licenses and flags it as a "cautionary signal"

TD Cowen ("buy," PT: $140) notes the likely impact of the $5.5 bln charges to near-term numbers but expects Blackwell shipments to core hyper-scale customers to remain a tailwind to revenue

Piper Sandler ("overweight," PT: $150) says it agrees with Nvidia's approach to take a one-time charge to address the product issue in one complete step rather than drag it out over several quarters as it provides the clearest and easiest pathway for return to growth

Wedbush ("outperform," PT: $175) says while the H20 news is concerning, it's not a shock as a trade war prevails between U.S. and China

Brokerage expects," more punches thrown by both sides before cooler heads prevail and negotiations in some form can start to get these 145% reciprocal tariffs down to a digestible level"