Nvidia’s Earnings Day: $78 Billion in Revenue, but a $50 Billion Chinese Market Remains Frozen

Nvidia reports Q1 results amid $5.5T market cap, but China’s delayed approval for H200 chips threatens its AI market share. Analysts expect 77% revenue growth.

The most anticipated corporate event in the semiconductor calendar lands on Wednesday with Nvidia set to report first-quarter results for its 2027 fiscal year. Yet the $5.5 trillion chipmaker heads into the numbers carrying a China-shaped question that could overshadow even a blockbuster quarter.

The US Commerce Department has granted export licenses for Nvidia's H200 chips to roughly ten Chinese companies, including Alibaba, Tencent, ByteDance and JD.com. Each buyer is allowed to acquire up to 75,000 units, strictly for civilian use. Not a single chip has been delivered. The hold-up lies in Beijing, where official approval has yet to materialise — leaving Nvidia's once-lucrative China business in regulatory limbo.

CEO Jensen Huang flew to Peking as part of a US trade delegation, invited by President Trump en route to the Alaska summit with Xi Jinping. Investors hoped for a breakthrough. None came. Nvidia shares slid 4% on Friday to $225.32 in New York, putting the stock roughly 4% below its recent 52-week high. In Frankfurt, the equity changed hands at €192.76, later edging up to €193.90.

Before export restrictions took hold, Nvidia commanded roughly 95% of China's AI-chip market, with the country accounting for 13% of overall revenue. Huang himself estimated China's AI market at $50 billion this year alone — a prize now effectively frozen. As the impasse drags on, local champions such as Tencent and Alibaba have accelerated their own chip development, threatening to deepen Nvidia's long-term exclusion.

Against that backdrop, Wall Street remains strikingly bullish. Analysts expect adjusted earnings per share of $1.76 to $1.78 on revenue of $78 billion to $79 billion, representing year-on-year growth of about 77%. The data-centre segment, powered by the new Blackwell architecture, is forecast to contribute more than $73 billion. A gross margin above 74% would signal that Nvidia retains pricing power during the architectural transition.

The company's biggest customers are pouring money into AI infrastructure. Meta has raised its capital-expenditure ceiling to $145 billion, Microsoft to $190 billion. Together with Amazon and Alphabet, the four tech giants plan combined investments of up to $830 billion in 2026, the bulk of which is expected to flow into Nvidia hardware. Eyes are also turning to the "Vera Rubin" architecture, slated for a second-half ramp.

The options market is bracing for volatility: a swing of 8% to 10% is priced in for Thursday alone. At Nvidia's current market capitalisation, that translates into hundreds of billions of dollars in potential market moves.

Bank of America has lifted its price target to $320, citing a larger addressable market for AI infrastructure that it now estimates at $1.7 trillion, up from $1.4 trillion. Bernstein and Citigroup see the stock at $300, while UBS is more cautious at $245.

Yet even a perfect earnings beat may ring hollow if management fails to provide clarity on production bottlenecks for the Blackwell systems or on the timeline for China deliveries. The Bureau of Industry and Security evaluates H200 export licences on a case-by-case basis, creating planning uncertainty not just for Nvidia but for the entire supply chain. As one analyst warned, even older chip generations are no longer immune to sudden policy shifts.

Wednesday's report will be judged not only by the numbers but by the answers Nvidia gives — on supply chains, on export policy, and on how long it can keep the world's second-largest economy at arm's length before the alternatives Chinese companies are building start to bite.