Nvidia earnings updates: Wall Street watching for tariff impact, China market share – Business Insider

Nvidia announced a partnership with Saudi tech firm Humain on May 13 to strengthen sovereign AI infrastructure and elevate the country’s position as an AI developer. The chipmaker’s stock surged to its highest valuation since February following the announcement.

Nvidia said in an announcement that the first phase of the 500 megawatt buildout will be a deployment of 18,000 Nvidia GB300 Grace Blackwell AI chips.

Nvidia defines “sovereign AI” as a nation’s capability to produce AI with its own resources, the chipmaker wrote on its website. It’s an area that Huang has emphasized multiple times.

“It codifies your culture, your society’s intelligence, your common sense, your history — you own your own data,” Huang at the World Governments Summit in Dubai last year.

— Ana Altcheck

Huang announced at the tech show Computex on May 19 that Nvidia is looking at the Beitou Shilin area in northern Taipei for a new Nvidia office named “Nvidia Constellation.”

Taipei’s mayor Chiang Wan-an, who showed up at Huang’s keynote, said in an interview following the announcement that the city government welcomes the chipmaker’s office and will provide assistance as needed.

Huang, who was born in Taiwan, also announced a partnership with TSMC to build an AI supercomputer in Taiwan. The project will be a joint effort between the Taiwanese government and Taiwan manufacturing firm Foxconn.

— Ana Altchek

At GTC this year, Jensen Huang announced plans for Nvidia to build a quantum research lab in Boston.

“It will likely be the most advanced accelerated hybrid quantum computing research lab world,” Huang said. “And it’s going to be located in Boston so that we can partner with Harvard and MIT.”

Wednesday’s earnings call is the company’s first since the announcement, and the quantum sector has been booming. Some notable startups include D-Wave, whose stock has risen over 138% in the last 30 days as of May 27; IonQ, whose shares have risen over 67% in the same timeframe; and Rigetti Computing, whose stock has increased by more than 53% in the last month.

As tech giants, including Nvidia, expand their quantum offerings, investors are keen on tangible road maps for their progress in the burgeoning field. Expect to see those plans mentioned more often going forward.

— Katherine Tangalakis-Lippert

Angelo Zino, a senior equity strategist at CFRA Research, said the outlook for Nvidia had “considerably improved” in recent weeks, pointing to progress between the US and China in securing a framework trade deal and the US getting rid of its AI diffusion rule, which would have imposed restrictions on Nvidia’s chip sales to China.

Nvidia’s recent Saudi Arabia deal also gives the company “strategic importance” in the US’s trade negotiations with other countries, Zino wrote in a note to clients.

“We believe NVDA’s content growth story in data centers will extend through at least 2027, supported by its product pipeline,” Zino said. “While quarterly variability is a risk, we view any pullbacks as enhanced buying opportunities given the better policy backdrop/customer visibility,” he added.

It’s the first earnings call for the company since US lawmakers said in April they were investigating how the Chinese AI company DeepSeek may have gotten Nvidia chips.

House Representatives said in a report that it appeared DeepSeek had used 60,000 Nvidia chips even though US sanctions limited the sale of the company’s tech in China. The lawmakers also accused Jensen Huang of directing the design of Nvidia chips to get around US export controls.

The company said in a statement at the time that “the US government instructs American business on what they can sell and where — we follow the government’s directions to the letter.”

— Kelsey Vlamis

While earnings for Nvidia should be “fine” for the first quarter, guidance will likely be lowered in the second quarter to account for a hit to the company’s revenue in China, analysts estimated.

“With regard to the F2Q26 we are slightly lowering estimates to account for a full hit from China,” the firm wrote in a note this month.

Still, demand for Nvidia’s products will likely remain on a solid trajectory in the coming years, the firm said, pointing to Nvidia’s recent deal with Saudia Arabia.

The research firm reiterated its “buy” rating on the stock and issued a price target of $150 a share, implying 11% upside from current levels.

Nvidia’s almost 25% share price jump this past month has come hand-in-hand with several announcements that place its chips at the center of vast new AI data centers.

During a trip to Saudi Arabia this month, Jensen Huang revealed a deal to ship 18,000 of Nvidia’s top chips to the country. Last week, the FT reported that Oracle will buy $40 billion worth of chips from Nvidia for a US data center.

Any sign that more deals are coming down the line could reassure investors that huge revenue growth in the chip giant’s lucrative data center business is still achievable.

— Hasan Chowdhury

Nvidia’s stock is up 25% in the last month. In an earnings preview note, Jefferies analysts led by Blayne Curtis wrote that Nvidia’s stock “has been running over the past few weeks” following an easing of AI restrictions by the US government and recent announcements of AI projects with the United Arab Emirates and Saudi Arabia.

The analysts wrote that they don’t expect these developments to help today’s results or guidance for the current quarter. The main drag on earnings will likely come from the Trump administration’s restriction on selling H20 chips to China. Still, the analysts expect quarter-on-quarter growth to be viewed positively by investors and that Nvidia’s supply chain issues will be resolved.

The networking business should also pick up, alleviating some investor concerns around potential market share loss in that sector, the analysts wrote in last week’s note.

— Shubhangi Goel

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

• Revenue estimate: $43.32 billion

  • Data center revenue estimate: $39.36 billion
  • Compute revenue estimate: $35.47 billion
  • Networking revenue estimate: $3.45 billion
  • Gaming revenue estimate: $2.85 billion
  • Professional Visualization revenue estimate: $505.8 million
  • Automotive revenue estimate: $584.2 million
• Adjusted gross margin estimate: 71.1%
• R&D expenses estimate: $4.06 billion
• Adjusted operating expenses estimate: $3.63 billion
• Adjusted operating income estimate: $25.66 billion
• Adjusted EPS estimate: 88c
• Capital expenditure estimate: $888.2 million

Second quarter

• Revenue estimate: $46.37 billion
• Adjusted gross margin estimate: 72%
• Adjusted operating expenses estimate: $3.86 billion
• Capital expenditure estimate: $913.9 million

Full year 2026

• Revenue estimate: $200.56 billion
• Capital expenditure estimate: $3.82 billion