Nvidia, a dominant force in the artificial intelligence chip sector, is navigating significant geopolitical complexities that are reshaping its global revenue streams. As the company prepares to disclose its latest financial results, investors are keenly focused on how recent export controls impacting its lucrative Chinese market will influence both current performance and future projections.
Impact of Export Restrictions on China Sales
Nvidia’s first quarter, ending April 27, concluded shortly after the Trump administration imposed new restrictions on sales of its advanced H20 chips to China. As China remains a pivotal market, investor focus during the upcoming earnings report will be keenly on the company’s commentary regarding the ban’s long-term impact.
Jensen Huang, Nvidia’s CEO, has openly described these export restrictions as “deeply painful,” attributing a staggering $15 billion loss in potential sales to these measures. An April regulatory filing further revealed Nvidia expects to incur $5.5 billion in first-quarter charges due to an inventory write-down, stemming from chips no longer salable to China. Huang further detailed that the company not only faces the $5.5 billion write-down but also forewent $15 billion in sales and an estimated $3 billion in taxes, underscoring China’s critical role as a $50 billion market for Nvidia.
Financial Projections and Market Performance
Despite these challenges, financial projections indicate a substantial 150% year-over-year surge in Nvidia’s revenue from China, reaching an estimated $6.2 billion for the first quarter. This figure is anticipated to account for over 14% of its total revenue, according to consensus estimates from Wall Street analysts tracked by Bloomberg. In contrast, U.S. revenue is expected to grow by a more modest 60% to $21.6 billion. Analysts anticipate the chipmaker’s overall revenue for the quarter to reach $43.3 billion.
These statements coincide with a challenging period for Nvidia’s stock in 2025, marked by declines linked to market concerns over AI chip demand and broader trade tensions. Ahead of the quarterly announcement, Nvidia’s stock saw an uptick, with options traders projecting a potential volatility of up to 7.4% following the earnings release.
Analyst Outlook and Future Strategies
Bank of America analyst Vivek Arya cautioned that the $5.5 billion inventory write-down, a direct consequence of the China ban, is expected to depress Nvidia’s gross margin for the period. Both Arya and Stifel analyst Ruben Roy anticipate Nvidia will slightly exceed first-quarter analyst expectations. However, Arya also flagged a potential for a “messy” second-quarter outlook due to the ongoing export restrictions. Looking ahead, investors are banking on new initiatives, such as a recent deal with Saudi Arabia and the rollout of its cutting-edge Blackwell AI chips, to bolster share performance post-earnings.
Emily Carter has over eight years of experience covering global business trends. She specializes in technology startups, market innovations, and corporate strategy, turning complex developments into clear, actionable stories for our readers.