Could this lead to a reduction in Nvidia's sales volume or revenue forecasts for the upcoming quarters?

Fundamental outlook:

The Chinese directive to avoid Nvidia’s H2O (and AMD’s) chips directly curtails a fast‑growing demand channel for Nvidia. China is already a key market for Nvidia’s data‑center and AI‑accelerator products, and the country’s recent “re‑approval” of shipments had been factored into the company’s guidance for FY‑2025. By warning firms to sideline Nvidia’s chips, the regulator effectively reduces the pipeline of new AI‑infrastructure projects that would have driven higher unit shipments and higher ASPs (average selling price). Unless the warning is short‑lived or limited to a niche set of applications, analysts will likely trim the sales‑volume and revenue forecasts for the next two‑to‑four quarters, especially for the data‑center segment that accounts for > 70 % of Nvidia’s growth.

Market & technical impact:

The news triggered a sharp dip in NVDA’s price action – the daily chart broke below the 20‑day EMA and is now testing the 10‑day lower‑high trendline, a classic bearish pattern after a regulatory shock. Momentum indicators (RSI ≈ 38, MACD negative) confirm the downside bias. The broader market remains risk‑off, and any further escalation of the China ban could accelerate the downtrend, while a quick resolution would likely spark a short‑cover rally.

Actionable insight:

Given the immediate downside pressure and the material upside‑risk to Nvidia’s near‑term revenue, a short‑position or a protective stop‑loss on long exposure is prudent for the next 4–8 weeks. If the stock stabilises above the 20‑day EMA (≈ $440) with volume support, consider a tight‑range trade; otherwise, stay on the sidelines until clarity on the duration of the China restriction emerges. Keep an eye on Nvidia’s upcoming earnings call for any forward‑looking guidance adjustments and watch for any diplomatic easing signals from Chinese regulators that could lift the restriction.