Investing.com-- NVIDIA Corporation’s (NASDAQ: NVDA ) disclosure of a $5.5 billion inventory charge tied to new U.S. export restrictions on its H20 AI chips to China has sparked sharp reactions from Wall Street analysts, who say the move underscores deepening geopolitical risks facing the chipmaker’s business in one of its largest markets.

According to Wedbush analysts, the charge, revealed in an 8-K filing, marks a “clear shot across the bow” from the Trump administration, which has intensified its crackdown on China’s access to advanced U.S. chips.

While the financial hit appears manageable, Wedbush said the broader concern is Nvidia’s mounting challenges in the Chinese market, calling the restrictions “massive blockades” for the company as tensions in the U.S.-China tech battle escalate.

"Adding to some of these concerns in our view was the DeepSeek scare heard around the tech world in January which makes this game of high stakes poker that much more tense...and Nvidia is a chip on the table for Trump in our view," Wedbush analysts wrote.

Mizuho analysts echoed the strategic concerns, estimating that Nvidia had around $16 billion in H20 orders, with about $10 billion potentially shipped.

The $5.5 billion charge likely reflects unsellable inventory tied to the export ban, Mizuho analysts said.

Mizuho noted that the curbs are in line with earlier expectations and flagged 2026 AI capital expenditure as a key focus going forward.

Mizuho reiterated an "Outperform" rating and $168 price target, citing Nvidia’s dominant AI position and robust growth outlook despite geopolitical headwinds.

Both firms pointed to Nvidia’s valuation resilience, though Wedbush cautioned that the announcement might fuel further volatility amid the broader U.S.-China tariff standoff.

Wall Street, they noted, is now bracing for more disruption in tech guidance as trade tensions continue to unfold.