Trump’s chip restrictions could slash Nvidia’s revenue by 10%, Wedbush analysts say 

• After the Trump administration placed restrictions on semiconductor sales abroad, Nvidia said it would take a $5.5 billion charge in a financial filing. But there might be more pain ahead for the chipmaker. Wedbush analysts estimate China represents slightly over 10% of Nvidia revenues, and suspect its revenue could fall by that same amount in future quarters.

The escalating trade war between the two largest economies in the world poses a predicament for Nvidia. 

The trillion-dollar chipmaker said it could no longer export a key chip to China because of fresh restrictions from the Trump administration. In a securities filing Tuesday, Nvidia said it would take a $5.5 billion charge owing to the export ban.

But that may not be the only hit it takes.

Wedbush Securities analysts suspect China represents just over 10% of Nvidia’s revenue. The analysts said they believed China was poised to deliver even more revenue for Nvidia because of increased demand. Either way, the analysts wrote in a note dated April 16, “we believe it now needs to be assumed that NVDA revenues in future quarters are likely reduced by ~10%.” 

Nvidia declined to comment. The note’s lead analyst, Matt Bryson, did not immediately respond to Fortune’s request for comment.

In a separate note, Wedbush analysts led by Dan Ives wrote President Donald Trump’s move to block Nvidia from selling its key H20 chips to China was the first shot fired in the trade war for the tech world since America placed a 145% tariff on China and the country retaliated. 

“This is just the beginning of what is going to be a long and drawn-out process between the U.S. and China,” Ives wrote. 

In early April, Trump unveiled a sweeping tariff regime. He later pressed pause, announcing a 90-day grace period to talk deals, placing a 10% blanket tax on other countries. China was the exception. 

There was some relief once it was announced there would be exemptions on electronics such as smartphones, computers, and semiconductors. But Trump later said no one was off the hook, and his Commerce Secretary Howard Lutnick warned tariffs were coming for technology. Monday still began with a tech rally, but it appears to have been short-lived. 

Global stocks and the three major indexes fell Wednesday. The tech-heavy Nasdaq slid more than 3% as of this writing. Nvidia shares are down nearly 9%.

The Nvidia disclosure, Ives said, is a clear sign Nvidia has massive restrictions in selling to China because the Trump administration knows there is one chip and company fueling the artificial intelligence revolution: Nvidia. 

In a statement to Fortune, Ives wrote: “China has a ‘Do Not Enter Sign’ in front of it from the White House, and this will translate into number cuts for Nvidia and other tech players. The economic impact of these tariffs is just starting to play out, and Nvidia is the first punch thrown in this tariff boxing match.”

This story was originally featured on Fortune.com