Nvidia Corp. will reveal financial results on Wednesday as investors worry that increasing US-China trade restrictions may impede the rapid growth of its data-center operations.
FactSet estimates that Nvidia will generate $43.3 billion in revenue together with adjusted earnings of 73 cents per share during the April quarter. Data-center revenue is projected to reach $39.4 billion during this period showing a 74% annual increase from last year yet the growth rate will be lower than January’s 93% expansion.
Analysts who study Nvidia’s performance are concerned about rising risks from Washington’s changing export controls against China even though the company continues to benefit from the AI market boom.
In April President Donald Trump banned H20 chip sales to China which disrupted Nvidia’s plans in this vital market. The company plans to record a $5.5 billion expense during the current fiscal quarter because of this move.
Jefferies analysts under Blayne Curtis predict Nvidia will fall short of meeting its guidance targets during the July quarter because of H20 revenue losses. According to the analysts any sequential growth would be considered positive by investors.
Analysts maintain that geopolitical uncertainty remains high despite recent reports about diplomatic improvements between the US and China specifically regarding Trump’s reversal of Biden’s AI export restrictions. The AI diffusion rule would have imposed export restrictions on advanced chips to all U.S. allies. The suspension of this rule provided some relief yet the prohibition on exporting AI chips to China continues in place.
The upcoming earnings announcement faces significant importance because the stock price has increased rapidly due to strong expectations. The stock may experience a price correction after its significant upward movement.
A deceleration in AI-driven demand combined with geopolitical factors could trigger a reset according to Angelo Zino who serves as senior equity analyst at CFRA.
The investor community wants to know about hyperscaler demand trends alongside new product announcements since Nvidia strives to maintain its AI market position in an increasingly fragmented global technology environment.
