On Wednesday, Nvidia Corporation (NASDAQ:NVDA) responded to a national security investigation, defending its compliance with U.S. export rules following the escalated restrictions on AI chip sales to China.
What Happened: In a statement issued on Wednesday, the company addressed a House Select Committee's inquiry into the sale of its H20 processors, which recently became subject to new export restrictions, reported CNBC.
“The U.S. government instructs American businesses on what they can sell and where — we follow the government's directions to the letter,” an Nvidia representative stated.
This statement came a day after the company warned it could face a $5.5 billion financial hit due to the canceled H20 chip orders, which the government has now classified as requiring a license for export to China.
Nvidia's H20 chips were previously legal for export to China under the Joe Biden administration's rules, but are now under stricter restrictions.
Why It's Important: Some of Nvidia's processors were reportedly used by China's DeepSeek to develop the R1 model.
On Wednesday, the company highlighted its contributions to the U.S. economy, including tax payments, domestic workforce, and leadership in technological innovation.
Nvidia also argued that its exports play a role in reducing the U.S. trade deficit — a point it raised in response to President Donald Trump's justification for implementing new tariffs.
On the same day, Bank of America analyst Vivek Arya stated that although the new restrictions on H20 chip exports to China are unfavorable, they were mostly expected and represent only a "manageable risk" to Nvidia's revenue projections.
The firm reaffirmed its positive outlook on Nvidia, keeping a Buy rating and a price target of $160, suggesting a potential 42.6% increase from Tuesday's closing price of $112.20.
Price Action: Nvidia's stock declined 7.06% on Wednesday, extending a broader slide that has resulted in a year-to-date drop of approximately 24.45%. Over the past 12 months, however, the stock has gained 19.53%, based on data from Benzinga Pro.
According to Benzinga Edge Stock Rankings, Nvidia currently boasts a growth score of 94.79%. Click here to see how it stacks up against other leading chipmakers.
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