Nvidia Earnings Updates: Tariff Impact and China Market Share in Focus

Restrictions on chip sales in China will likely remain an “overhang” on Nvidia until new rules are implemented, analysts at DA Davidson wrote.

New restrictions on chips sold in China could also come “any day,” they added, despite the Trump administration recently rolling back Biden’s AI diffusion rule.

The firm reiterated its “neutral” rating on the stock and issued a $120 price target, which they said was dependent on factors like how regulation in China will shake out and if some of Nvidia’s neocloud customers face borrowing challenges. The price target implies 11% downside from current levels.

In April, President Donald Trump placed restrictions on exports of Nvidia’s H20 chips to China. The chipmaker said it expected a $5.5 billion write-down in its first-quarter earnings as a result of the new restrictions.

During the Computex Taipei tech conference in Taiwan on May 21, Huang said the chipmaker’s market share in China dropped to 50%, down from 95% four years ago. He added that Chinese companies have benefited from US chip export rules, and they have been “a failure.”

The chipmaker is reportedly planning to begin mass production for a less powerful AI chipset for China at a lower price as early as June, Reuters reported on Monday.

— Ana Altcheck

Piper Sandler said it expects Nvidia to miss on revenue for the first quarter. That’s due to uncertainties related to the US economy, tariffs, and the ban on its H20 chip in China.

“All in all, we think that NVDA is poised to be flat to down into the print this week,” analysts wrote.

Still, the firm sees Nvidia benefiting from a strong second half of the year. That’s due to strong capital expenditures from other tech firms and an improving macroeconomic backdrop.

“We advise investors to weather the uncertainty and stay long the stock as this is likely largely the last wave of negative news for NVDA this year.”

The firm reiterated its “overweight” rating on Nvidia and issued a $150 price target, implying 11% upside from current levels.

A concern often raised by Nvidia investors is the small pool of customers it has depended on to generate billions of dollars in revenue. A handful of Big Tech firms have accounted for more than half of Nvidia’s data center revenue as the AI boom has taken shape.

But Nvidia has shown signs that its days of depending on West Coast tech firms may soon be over. Deals to sell its chips to nation states with plans to build sovereign AI capabilities have been picking up. Investors could look to get a clearer roadmap on plans to widen its customer base.

— Hasan Chowdhury

Nvidia should post a “modest” sales beat in the first quarter, but analysts at Bank of America said the company’s guidance for the current quarter could be “messy. ” They pointed to the impact of tariffs on Nvidia’s shipments from China.

The bank estimated that Nvidia could see a $4 billion to $5 billion headwind on shipments from China in the second quarter. Sales guidance for the second quarter could be revised down to $41 billion, down from the $46 billion consensus estimate.

BofA estimated that Nvidia’s total sales for the 2026 fiscal year could be around 6% below consensus, while earnings could be around 10% below consensus.

“Despite these near-term headwinds, we maintain Buy on NVDA, a top sector pick given its unique leverage to the global AI deployment cycle and possibility for China sales recovery on new redesigned/compliant products later in the year,” analysts wrote.

The bank has a price target of $160 a share, implying 19% upside from current levels.

First quarter

Second quarter

Revenue estimate: $46.37 billionAdjusted gross margin estimate: 72%Adjusted operating expenses estimate: $3.86 billionCapital expenditure estimate: $913.9 million

Full year 2026

Revenue estimate: $200.56 billionCapital expenditure estimate: $3.82 billion