Nvidia’s Q3 Earnings: Massive Jump in Revenue Sparks Concerns amid US-China Chip Restrictions
Artificial intelligence giant Nvidia is set to release its third-quarter earnings on Tuesday, November 21st, after the market closes. Industry analysts anticipate earnings per share of $3.39 on revenues of $16.11 billion for the quarter, representing a significant surge of 172%.
Nvidia, headquartered in Santa Clara, California, is expected to surpass third-quarter revenue expectations once again, benefitting from the increasing adoption of AI across various industries. However, industry observers are now questioning the sustainability of this growth due to the expanding restrictions on high-end chip sales from the United States to China.
Nvidia’s shares have skyrocketed by over 247% year-to-date, propelling the company to become the first trillion-dollar chip firm. The Philadelphia semiconductor index has also experienced a significant jump of nearly 50%.
Investment firm Citi highlights that as the earnings release approaches, investors are particularly concerned about the impact of the US restrictions on AI chips to China, especially on NVDA’s data center sales outlook in fiscal years 2025 and 2026.
The US recently implemented new updates to its export restrictions, curbing the sale of chips manufactured by Nvidia, such as the A800 and H800 chips, intended for the Chinese market. These measures are part of Washington’s efforts to limit China’s access to advanced semiconductor technology.
Nvidia, however, has stated that it does not foresee a meaningful short-term impact on its financial results. Nonetheless, The Wall Street Journal reported that the latest US export restrictions on high-end chips could put $5 billion worth of orders at risk.
According to a Reuters report citing local news outlet STAR Market Daily, Nvidia is expected to unveil three new chips designed for China. Despite holding over 90% share of China’s $7 billion AI chip market, industry analysts believe the US restrictions may create opportunities for local players like Huawei Technologies.
In conclusion, Nvidia’s third-quarter earnings announcement is highly anticipated, given the company’s impressive revenue growth. However, concerns persist regarding the impact of US-China chip restrictions on Nvidia’s future growth potential. As the trade tensions continue, all eyes are on how Nvidia will navigate these constraints and sustain its dominion in the AI chip market.
