As Nvidia gears up to release its quarterly earnings on Wednesday, investor attention is centered on the impact of U.S. export restrictions to China.
The company has announced a $5.5 billion write down on inventory for its H20 chip—an unprecedented move analysts say marks the largest write down in chip industry history. Although Nvidia continues to post strong revenue growth—far outpacing other tech giants—the pace is slowing significantly compared to last year. Demand for AI infrastructure remains robust, but the outlook is clouded by geopolitical challenges.
The key issue heading into this earnings report is China. On April 9, the Trump administration informed Nvidia that it would need an export license for the H20 chip, a variant of its Hopper processor tailored to meet earlier U.S. restrictions. The move is part of broader U.S. concerns, dating back to the Biden administration, over advanced AI chips being used in military applications by foreign adversaries.
The fallout has been costly. BNP Paribas analyst David O’Connor noted that the $5.5 billion inventory charge suggests a potential $15 billion revenue hit over a 12-month span.
For the quarter ended in April, analysts expect Nvidia to report $43.28 billion in revenue—a 66% year-over-year increase, according to LSEG. While impressive, it’s a sharp slowdown from the more than 250% growth seen a year ago. Projections for the current quarter and fiscal year suggest revenue growth in the 50–55% range, highlighting lingering uncertainty from the new export restrictions.
Morgan Stanley analysts said Tuesday that Nvidia was caught off guard by the H20 license requirement, believing initially that the chip would pass regulatory scrutiny.
Despite early-year volatility, Nvidia shares have rebounded and are now up about 1% for 2025, outperforming the Nasdaq, which is down 1%. Nvidia CEO Jensen Huang recently said the company’s GPU market share in China has dropped from 95% to 50% due to export controls. In its February SEC filing, Nvidia reported $17.1 billion in annual sales to customers in China, including Hong Kong—making it the company’s fourth-largest market.
Huang has argued that restricting AI chip exports to China could accelerate the country’s development of its own processors, undermining U.S. technological leadership in the long run.
There was some relief in May, when the Trump administration scrapped the proposed “AI diffusion rule,” which would have imposed stricter export controls. However, a new, streamlined version of the rule is reportedly in the works, meaning regulatory uncertainty continues.
Morgan Stanley analysts expect ongoing questions about Nvidia’s China strategy and potential for H20 export licenses. “There’s a conversation to be had about what will ultimately be allowed in China—but probably not on this earnings call,” they wrote. The firm reaffirmed the stock as its top pick in the semiconductor space. Analysts recently revised estimates lower following a ban on Nvidia’s H20 chips in China, which is expected to constrain Q2 revenue. That said, Nvidia reported “significant improvements” in GB200 chip shipments in April. The firm emphasized the need for tempered expectations in the short term.
What are other analysts saying?
Bank of America
Bank of America expects Nvidia to report a modest revenue beat for its fiscal first quarter, but warned that second-quarter guidance could be complicated due to the impact of tariffs on Chinese shipments. Analysts estimate Nvidia could face a $4–$5 billion revenue headwind from China in Q2, potentially pushing sales guidance down to $41 billion—well below the current consensus of $46 billion.
The bank also flagged risks to Nvidia’s guidance from potential returns tied to its partnership with General Motors and noted the company’s recent $5.5 billion loss from U.S. export restrictions.
For the full fiscal year 2026, BofA forecasts Nvidia’s total sales could miss consensus by about 6%, with earnings falling short by roughly 10%. Despite these near-term pressures, the bank maintained its Buy rating, citing Nvidia’s central role in the global AI rollout and the possibility of a rebound in China sales through redesigned, compliant products.
Price target: $160, implying 18% upside from current levels.
Piper Sandler
Piper Sandler expects Nvidia to miss revenue estimates for Q1, citing U.S. economic uncertainty, tariffs, and the China ban on its H20 chip. “Overall, we expect shares to be flat to down following the print this week,” analysts noted.
Still, the firm sees a stronger second half of the year, driven by increased tech sector capex and an improving macroeconomic environment. A recent deal with a Saudi Arabian tech firm could further boost Nvidia’s performance in the latter half of the year.
Piper advised investors to ride out the volatility, stating this is likely the last major wave of negative news for Nvidia this year.
Rating: Overweight | Price target: $150, implying 11% upside.
DA Davidson
DA Davidson cautioned that U.S. restrictions on chip sales to China will remain a drag on Nvidia’s outlook until new rules are finalized. The firm noted that additional export restrictions could be introduced at any time, despite a recent rollback of Biden-era AI rules by the Trump administration.
They observed that Nvidia’s largest customers—core hyperscalers like Microsoft and Amazon—appear to be stabilizing, but demand from other customers such as neocloud providers may be affected by debt issues and regulatory uncertainty.
Rating: Neutral | Price target: $120, implying 11% downside from current levels.
Melius Research
Melius expects Nvidia’s Q1 earnings to be solid but anticipates lowered Q2 guidance due to China-related headwinds. “We’re slightly lowering our F2Q26 estimates to reflect the full China impact,” the firm wrote.
Nevertheless, Melius remains optimistic about Nvidia’s long-term demand trajectory, especially in light of its deal with Saudi Arabia and speculation about a possible U.S.-China trade agreement. The firm believes Nvidia could re-enter the $50B+ Chinese market with a redesigned, lower-performing chip that complies with export controls.
Rating: Buy | Price target: $150, suggesting 11% upside.
CFRA Research
CFRA’s Angelo Zino said Nvidia’s outlook has “significantly improved” recently, citing progress on a potential U.S.-China trade deal and the rollback of the AI diffusion rule, which had threatened to restrict chip sales.
Zino also highlighted Nvidia’s increasing strategic relevance following its Saudi Arabia deal and expects continued robust AI investment from tech giants like Google, Meta, and Amazon. These firms plan to boost capital expenditures in 2025, with a focus on AI and data center infrastructure.
“We believe Nvidia’s data center content growth story will continue through at least 2027,” Zino wrote, calling any short-term pullbacks “enhanced buying opportunities.”
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