Nvidia (NVDA.O) issued a second-quarter revenue forecast below Wall Street expectations on Wednesday, anticipating significant sales disruption from tightened U.S. restrictions on AI chip exports to China.
The semiconductor leader expects $45 billion (±2%) in Q2 revenue, missing analysts’ $45.9 billion consensus estimate, with approximately $8 billion in projected losses from constrained H20 chip sales to China.
Despite the lowered guidance, shares gained 3% in after-hours trading. The muted year-to-date performance (flat versus 2023’s 200% surge) reflects dual pressures: escalating U.S.-China trade barriers and maturation in the AI data center market.
Regulatory Headwinds Mount
The Biden administration’s latest export controls, targeting China’s access to advanced U.S. semiconductors, have specifically impacted Nvidia’s H20 chips—its only AI processor still legally exportable to China. These restrictions forced a $5.5 billion charge in Q1 and could ultimately cost the company $15 billion in revenue, according to CEO Jensen Huang’s earlier projections.
Mixed Earnings Picture
First-quarter adjusted EPS of $0.81 fell below the $0.96 potential result excluding China-related charges. Analyst estimates had varied significantly (LSEG consensus: $0.93) following Nvidia’s April 15 disclosure that H20 shipments now require additional licenses.
Industry Paradox
While cloud giants Microsoft and Alphabet continue heavy AI infrastructure investments, Nvidia’s outlook underscores growing concerns about how geopolitical tensions may reshape global tech supply chains. The company’s ability to offset Chinese market losses through other regions and product segments remains a key focus for investors.
