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Nvidia to report second quarter earnings, expects $8 billion hit from China chip ban | AllMind AI News | AllMind AI

Nvidia is set to report Q2 earnings, with consensus estimates projecting adjusted EPS of $1.01 on revenue of $46.2 billion, reflecting 49% and 53% year-over-year growth respectively, despite a previously guided $8 billion impact. This report comes as the Trump administration has imposed a 15% cut on Nvidia's China sales, following a revoked ban, and introduced broader semiconductor tariffs, though Nvidia is likely exempt. Investors will keenly watch commentary on China sales, the ramp-up of GB200 and Blackwell Ultra chips, and AI spending, particularly given Nvidia's 35% YTD stock surge and recent $4 trillion market cap, as the company's growth moderates from its AI-fueled peak.

Analysis

Nvidia is positioned for a strong Q2 earnings report, with consensus estimates projecting 49% year-over-year growth in adjusted EPS to $1.01 and 53% revenue growth to $46.2 billion. This performance is largely driven by the Data Center segment, which is expected to report $41.2 billion in revenue, a significant increase from $26.2 billion in the prior year. While this growth is substantial, it represents a moderation from the triple-digit expansion seen at the peak of the AI boom, with one analyst from Evercore ISI projecting growth may bottom out around 50%. A key variable in this report is the impact of U.S. trade policy; following a revoked ban, the Trump administration has imposed a 15% fee on Nvidia's sales to China, a development that follows the company's prior guidance of an $8 billion hit to its Q2 bottom line. Despite this headwind, analyst sentiment on operational execution is positive, with KeyBanc Capital Markets noting improving GB200 rack manufacturing yields approaching 85% and raising full-year shipment estimates. The stock's performance reflects this optimism, having risen 35% year-to-date and recently surpassing a $4 trillion market capitalization, though investors will be keenly focused on management's commentary regarding China sales and the production ramp of its next-generation chips.

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Market Sentiment

Overall Sentiment

strongly positive

Sentiment Score

0.70

Ticker Sentiment

EVR0.00

KEY0.00

NVDA0.70

Key Decisions for Investors

Investors should scrutinize management's commentary on the earnings call for clarity on the financial impact of the 15% government cut on China sales and any updates to the previously guided $8 billion hit to the bottom line.
Monitor guidance on the shipment velocity of the GB200 super chip and the ramp-up of the Blackwell Ultra chip, as positive manufacturing yield data from KeyBanc suggests potential for an upward revision in full-year shipment forecasts.
Evaluate whether the expected 50% growth floor, coupled with the stock's 35% year-to-date appreciation and $4 trillion valuation, still presents a compelling risk-reward profile, or if the period of hyper-growth is fully priced in.
While Nvidia is expected to be exempt from the new 100% semiconductor tariff, the evolving U.S. trade policy on China remains a key risk factor that could impact future revenue streams and requires careful monitoring.