Nvidia Earnings Report: Impact of US Export Curbs on China Sales
Nvidia's upcoming earnings report is expected to shed light on the financial repercussions of U.S. export restrictions on chip sales to China. Investors are keen to understand how significantly these curbs, particularly on the H20 chip, have impacted the company's revenue. Previously, Nvidia CEO Jensen Huang stated the company lost $15 billion in sales after the restrictions, even with expectations of a $50 billion AI chip market in China next year.
Revenue and Market Impact
Analysts anticipate a potential drop in revenue due to the export limits, with estimates ranging from $3 billion to $4 billion per quarter. Despite plans to introduce a new AI chipset based on the Blackwell architecture for the Chinese market, uncertainties persist. Furthermore, concerns about rising AI infrastructure costs have added pressure on Nvidia's stock.
Financial Projections and Analysis
Nvidia's Q1 revenue is projected to have surged by 66.2% to $43.28 billion. However, analysts predict a significant decrease in adjusted gross margin, potentially exceeding 11 percentage points, due to write-downs linked to H20 shipments. Huang has criticized the U.S. semiconductor curbs as a failure, suggesting they are accelerating the development of domestic chip manufacturing capabilities in China, like Huawei.
Policy Changes and Future Outlook
In other news, Washington is considering modifications to the Biden-era AI diffusion rule, which initially aimed to limit exports of advanced AI chips.