Nasdaq 100: Nvidia Fallout Looms — Will Investors Sell Ahead of Earnings Shock?

Trump’s China Curbs Hit Nvidia Earnings — Can Middle East Deals Cushion the Blow?

Nvidia’s earnings report due today is set to reflect the sharp financial fallout of Donald Trump’s return to power, with export restrictions on China slashing billions in expected revenue. The Trump administration’s aggressive trade and industrial policy has already altered Nvidia’s revenue profile and global strategy, with far-reaching implications for the AI chipmaker’s position in the global tech sector.

China Export Ban Triggers $5.5B Write-Down and Margin Compression

The most immediate drag on Nvidia’s Q2 performance is the Trump administration’s restriction of AI chip exports to China—specifically targeting the H20 chip, which had remained one of Nvidia’s few approved offerings in the region. The ban triggered a $5.5 billion write-down and forced Nvidia to forfeit $15 billion in near-term sales opportunities, roughly 13% of its total revenue base. The April quarter alone is expected to reflect a $1 billion shortfall from lost Chinese sales, while gross margins are forecast to fall 11 points to 67.7%.

In response, Nvidia has pivoted quickly, striking new deals in the Middle East. These include a sale of 18,000 next-gen Blackwell chips to a Saudi fund-backed startup and multiple agreements with UAE firms. Trump’s rollback of Biden-era AI restrictions has re-opened some emerging markets, providing limited relief—but not full substitution—for lost Chinese demand.

Federal Reserve Policy Volatility Adds to Nvidia’s Risk Mix

Despite these new deals, analysts forecast quarterly revenue losses of $3–$4.5 billion from China for the rest of the year. Nvidia’s interim strategy includes a cheaper, export-compliant chip for China priced at $6,500–$8,000. However, this product carries thinner margins, contributing to a profitability drag that will likely persist. Meanwhile, trade policy instability continues to weigh on sentiment, with the stock underperforming significantly after last year’s massive gains.

Trump’s Industrial Policy May Reshape Nvidia’s Supply Chain

Longer term, Trump’s push for domestic manufacturing and supply chain “resilience” may force Nvidia to move production away from Asia, particularly Taiwan’s TSMC. CEO Jensen Huang has expressed support for the policy direction, calling it “visionary,” but acknowledged the cost implications. U.S. foundries may benefit, but Nvidia could face margin compression during the transition. Tariff expansion remains another risk, with potential cost increases for imported components if broader duties are enacted.

Market Outlook: Bearish Near-Term, Strategic Repositioning Underway

Traders should brace for a bearish short-term view on Nvidia, with weaker gross margins, multi-billion dollar lost revenue, and product mix pressures dominating the outlook. Middle East growth and U.S. policy incentives may offer medium-term support, but the company’s global strategy remains under pressure as it adjusts to Trump’s unpredictable trade and industrial policy stance.

More Information in our Nvidia’s earnings report.