The days of Nvidia consistently shattering Wall Street expectations may be transitioning to a new phase as the company prepares to report quarterly results on Wednesday amid significant headwinds from U.S.-China trade tensions. After averaging quarterly revenue beats of 4.9% in its last fiscal year and an impressive 12.5% in the year before, investor expectations have become more measured following export restrictions that CEO Jensen Huang says have forced Nvidia to abandon $15 billion in potential Chinese sales.
“I don’t think investors expectations are very high as we go into it,” observed Ivana Delevska, chief investment officer of Spear Invest, which holds Nvidia shares in an actively managed exchange-traded fund. The cautiousness comes as Nvidia anticipates a $5.5 billion charge related to restrictions on its H20 chip—the only AI processor it was previously allowed to sell in China, a market that represented 13% of its revenue last year. Despite these challenges, analysts still project first-quarter revenue will surge 66.2% to $43.28 billion.
The earnings report will provide crucial insights into Nvidia’s ability to navigate a transformed geopolitical landscape. While the company has secured new opportunities, including agreements to sell hundreds of thousands of AI chips to Saudi Arabia as part of President Trump’s trade deals with Gulf countries, analysts caution that revenue contributions from these regions will likely be relatively small in the near term. Meanwhile, Huang has publicly criticized U.S. semiconductor restrictions on China as “a failure,” arguing they have only accelerated development of homegrown chips by Chinese competitors like Huawei.