Nvidia beats Q1 expectations, warns of $8B Q2 hit from H20 China export curbs

Nvidia reported its financial results for the first quarter of fiscal 2026, ended April 27, 2025, with revenue exceeding expectations, according to a report from ijiwei, citing Reuters. However, the report also notes that the company’s second-quarter forecast fell short of market estimates, as Nvidia expects a potential USD 8 billion hit to sales due to tightened U.S. export restrictions on H20 AI chips to China.

Nvidia lost USD 2.5B on H20 sales in Q1 due to US curbs
As per the report, Nvidia recorded a USD 2.5 billion loss in H20 chip sales during the first quarter and expects to miss out on another USD 8 billion in the second quarter due to ongoing export restrictions.

Despite the setback, Nvidia still posted USD 4.6 billion in H20 chip sales during the first quarter, with China contributing 12.5% of total revenue for the period, as highlighted in the report. Reuters notes that Chinese customers had accelerated purchases to stockpile H20 chips ahead of the export restrictions—an effort that helped support Nvidia's revenue in the April quarter.

H20 export curbs trim USD 8B from Nvidia's Q2 guidance
Nvidia's second-quarter outlook reflects continued headwinds from export restrictions. The company expects revenue of approximately USD 45 billion, plus or minus 2%, slightly below the USD 45.90 billion average estimate from analysts surveyed by LSEG, according to the report. The forecast factors in an anticipated USD 8 billion loss in H20 chip sales due to the latest U.S. export controls, the report notes.

U.S. restrictions on the sale of Nvidia's H20 chips—its only AI processors approved for export to China—led the company to project a USD 5.5 billion charge in April, with CEO Jensen Huang later estimating a USD 15 billion revenue impact. However, last Wednesday, Nvidia said the actual first-quarter charge was USD 1 billion lower than expected, thanks to the reuse of certain materials, according to Reuters.

Nvidia posted Q1 fiscal 2026 revenue of USD 44.1 billion, up 12% QoQ and 69% YoY. Data center revenue reached USD 39.1 billion, rising 10% QoQ and 73% YoY.

Future plan for AI chip tailored to China
CNBC notes that when asked about the possibility of developing a new AI chip specifically for the Chinese market, CEO Jensen Huang said there is currently no replacement product.

Meanwhile, TrendForce reports that following the new U.S. export restrictions announced in April, Nvidia is expected to release a special low-power, downscaled version of the RTX PRO 6000 (formerly B40) for the Chinese market. This model will reportedly switch from the originally planned HBM memory to GDDR7, with a potential market debut as early as the second half of 2025.

-- Source: TrendForce, Taiwan.