All Eyes on China as Nvidia Prepares to Report Earnings Amid Record Write-Down

Nvidia is set to report quarterly earnings on Wednesday, but investor focus is centered less on headline numbers and more on the deepening impact of U.S. export restrictions to China — a factor that has triggered a historic $5.5 billion inventory write-down.

The semiconductor giant, long viewed as a bellwether for artificial intelligence infrastructure, faces rising uncertainty due to regulatory barriers targeting its business in one of its largest international markets.

In April, the U.S. government informed Nvidia that it would now require an export license for its China-specific H20 chip — a modified version of its high-performance Hopper processor. The move, driven by national security concerns, follows a series of restrictions first introduced under President Biden and continued by President Trump.

As a result, Nvidia said it would write down $5.5 billion in inventory — a decision analysts have labeled the largest in chip industry history. BNP Paribas estimates the loss could equate to a $15 billion revenue hit over the next year.

Despite the setback, Nvidia is expected to post April-quarter revenue of $43.28 billion, marking 66% year-over-year growth, according to LSEG. While still strong, that’s a notable deceleration from the 250% surge recorded during the same period last year.

Looking ahead, analysts predict growth to slow further to 53% for the current quarter and the fiscal year ending January 2026.

“There’s a great deal of uncertainty around how Nvidia will navigate its China business from here,” analysts at Morgan Stanley wrote. “While the H20 was seen as compliant, it’s now clear the company was surprised by the restrictions.”

Nvidia shares have recovered from a weak start to the year, now up roughly 1% in 2025, outpacing the Nasdaq’s 1% decline.

China remains a critical market. In its most recent SEC filing, Nvidia reported $17.1 billion in annual revenue from Chinese customers, including Hong Kong — making it the company’s fourth-largest market. But CEO Jensen Huang recently revealed that Nvidia’s market share in China has plunged from 95% to 50% due to U.S. curbs.

Speaking in Taiwan earlier this month, Huang warned that export bans may backfire, spurring domestic chip development in China and weakening U.S. tech leadership. “Restrictions won’t stop China — they’ll only accelerate its innovation,” Huang said.

Nvidia recently welcomed a decision by the Trump administration to rescind the “AI diffusion rule,” which had proposed even stricter export controls. Still, a replacement rule is in development, and analysts expect regulatory uncertainty to remain a theme in future quarters.