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Nvidia Faces Export Headwinds Ahead of Earnings Report
Nvidia is set to release its quarterly earnings on Wednesday, but investor attention has shifted to the implications of tightened U.S. export controls to China. While the company continues to benefit from robust demand for its graphics processors—driven largely by accelerating interest in AI infrastructure—geopolitical developments have cast a shadow over its outlook.
On April 9, the U.S. government informed Nvidia that it would require an export license for shipments of its H20 chip, a variant of the Hopper processor developed specifically to comply with earlier restrictions. In response, Nvidia announced a planned $5.5 billion inventory write-down linked to H20 chip exports to China and other regions, which analysts at BNP Paribas describe as the largest in semiconductor industry history.
This write-down suggests a potential revenue impact of $15 billion over a 12-month period, with H20 chips previously generating $12–15 billion in revenue in 2024. The restrictions are rooted in national security concerns, particularly the potential use of advanced AI chips in foreign military applications.
CEO Jensen Huang previously noted that revenue from China has dropped to 50% of pre-restriction levels and warned of intensifying domestic competition, including from Huawei, now listed as a competitor in Nvidia’s annual filing for a second year.
According to LSEG, analysts anticipate 66% revenue growth to $43.28 billion for the April-ended quarter—a notable decline from last year’s 250% surge. The outlook for the remainder of the fiscal year remains clouded by export uncertainties, with projected growth of 53% for the upcoming quarter and full year.