Nvidia’s Wednesday Earnings Report Set to Reveal True Impact of China Trade Curbs

Wall Street investors are bracing for Nvidia’s quarterly earnings announcement on Wednesday, which will provide the first concrete assessment of how U.S. export limitations on China are affecting the AI chipmaker’s bottom line. The company faces the challenge of demonstrating whether it can generate sufficient revenue growth in other markets to compensate for the loss of its Chinese business, which CEO Jensen Huang valued at approximately $50 billion annually.
Analysts from Wedbush have identified the central question surrounding the earnings report: whether Nvidia can successfully offset the elimination of H20 chip sales and broader Chinese market access through expansion elsewhere. The restrictions, which took effect in the final three weeks of the April quarter, are estimated by Susquehanna analysts to have cost the company roughly $1 billion in immediate sales. Looking ahead, the financial impact could reach $4.5 billion per quarter, representing a substantial portion of Nvidia’s revenue stream.
The company’s adjusted gross margin is projected to suffer significantly, with expectations of an 11 percentage point drop to 67.7%. Write-downs associated with H20 shipment restrictions could drive margins down by as much as 12.5%, according to Wedbush estimates. Despite these near-term challenges, Nvidia is positioning itself for growth in newly accessible markets, particularly in the Middle East, where trade agreements with Gulf countries have opened opportunities for substantial chip sales to regional partners.