Nvidia Excludes China Market from Revenue Forecasts Amid U.S. Trade Restrictions
By Juby Babu
(Reuters) – Nvidia has announced that it will no longer include the China market in its revenue and profit forecasts due to stringent U.S. trade restrictions on chip sales to the region. CEO Jensen Huang revealed this decision in an interview with CNN on Thursday.
When asked about the possibility of the United States lifting the export controls following trade discussions with China in London, Huang expressed skepticism. “But, if it happens, then it will be a great bonus. I’ve told all of our investors and shareholders that, going forward, our forecasts will not include the China market,” he stated.
Huang reiterated his criticism of U.S. chip export curbs during the interview, emphasizing that the goals of the export controls are not being achieved. He highlighted the impact of the restrictions that prevented Nvidia from selling its H20 chip designed for China.
“Beyond next quarter, if Nvidia is not able to resume sales into China, we believe there may be some downside to expectations for calendar year 2026,” said analyst Gil Luria from D.A. Davidson.
Nvidia stated that it is still evaluating its options for the China market. The company mentioned, “Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China’s $50 billion data center market.”
The export limits have had a significant financial impact on Nvidia, costing it $2.5 billion in sales during the first quarter, with an expected $8 billion sales hit in the second quarter.
“By zero-basing China, Nvidia removes a volatile variable that neither Wall Street nor the Commerce Department can reliably handicap,” stated Michael Ashley Schulman, CIO of Running Point Capital, highlighting the uncertainty surrounding the situation.
In the first quarter, Nvidia reported $4.6 billion in revenue from H20 sales as customers stockpiled the chips before the export controls were imposed, with the China business contributing 12.5% of overall revenue.
(Reporting by Juby Babu in Mexico City; Editing by Alan Barona and Pooja Desai)
