Nvidia’s quarterly earnings report on Wednesday will offer the first detailed glimpse into how escalating technology restrictions between the U.S. and China are reshaping the semiconductor landscape. After the Trump administration imposed export limits on Nvidia’s H20 chip last month—a move the company says will result in $5.5 billion in charges—investors are anxiously awaiting concrete figures on how much this geopolitical maneuvering will ultimately cost the AI chip leader.
The stakes are substantial, with CEO Jensen Huang recently disclosing that Nvidia has walked away from approximately $15 billion in potential sales in China due to U.S. restrictions. This represents a significant blow considering China accounted for 13% of the company’s revenue last year, and Huang estimated the market for AI chips in China could reach around $50 billion next year. Analysts from Susquehanna project the lost revenue could amount to as much as $4.5 billion per quarter for the remainder of 2024, while Wedbush estimates a quarterly impact of $3 billion to $4 billion.
Amid these challenges, Huang has publicly criticized U.S. semiconductor curbs on China as “a failure,” arguing they have only accelerated development of homegrown chips by Chinese competitors like Huawei. Nevertheless, Nvidia is adapting its global strategy, securing agreements to sell hundreds of thousands of AI chips to Saudi Arabia as part of President Trump’s trade deals with Gulf countries. After nearly tripling in value last year, Nvidia’s stock has dropped 2% in 2024 as investors recalibrate expectations, with Wednesday’s report potentially determining whether the company can maintain its extraordinary growth trajectory despite significant geopolitical headwinds.