Nvidia Stock Crashed on Bad News From Washington. Should Investors Buy the Dip?

Core Viewpoint - Nvidia's shares fell over 7% following the announcement of new export restrictions on its AI chips, requiring licenses from the U.S. government to sell H20 processors in China [1][2]. Group 1: Export Restrictions Impact - Nvidia plans to take a $5.5 billion charge related to H20 products due to the new export restrictions, which will affect its fiscal Q1 2026 [2]. - The latest restrictions are expected to cost Nvidia between $14 billion and $18 billion in revenue for fiscal 2026 [4]. - China accounted for over 26% of Nvidia's total revenue in fiscal 2022, but this figure dropped to just 13% in fiscal 2025, indicating a significant decline in the company's business in China [5]. Group 2: Financial Performance and Analyst Reactions - Despite the challenges, Nvidia reported exceptional financial results since the generative AI boom began in late 2022, with total sales increasing at 69% annually during that period [5]. - The median target price for Nvidia shares has decreased from $175 to $170, still implying a 63% upside from the current price of $104 [6]. - Analysts remain generally bullish on Nvidia, with some maintaining their target prices despite the export controls, indicating confidence in the company's long-term prospects [6][7]. Group 3: Analyst Forecast Adjustments - Several analysts have revised their price forecasts downward, with Bank of America cutting its estimate from $200 to $160, and Piper Sandler reducing its forecast from $175 to $150 [9]. - The average estimate currently anticipates a 51% increase in Nvidia's earnings for fiscal 2026, suggesting that the current valuation may be attractive for patient investors [8].