NVIDIA (NVDA) Stock: Tariff Fears Eclipse Blockbuster Earnings Week

TLDR

Table of Contents

NVIDIA stock dropped 2.2% to $129.87 on Friday as Trump’s tariff threats overshadowed upcoming earnings
First-quarter earnings expected Wednesday after market close with analysts forecasting 73 cents per share and $43.3 billion revenue
Company faces $15 billion in lost sales from tightened H20 chip controls in China market
BofA maintains Buy rating with $160 price target despite near-term China headwinds
Consensus expects 66% revenue jump year-over-year driven by strong AI chip demand

NVIDIA shares fell 2.2% to $129.87 in Friday trading as President Trump’s social media posts about potential tariffs on Apple iPhones and European goods sent chip stocks tumbling. The broader S&P 500 declined 1.1% during the session.

The selloff came as investors were preparing for what was expected to be a quiet Memorial Day weekend trading session. Trump’s tariff warnings changed that dynamic quickly.

Advanced Micro Devices dropped 2.2% while Broadcom slid 0.7%. Intel declined 2.5% and Qualcomm fell 3% as the sector felt the pressure.

Earnings Week Ahead

Next week brings NVIDIA’s highly anticipated first-quarter earnings report. The company will announce results after Wednesday’s market close.

9) $NVDA earnings preview
Est. revenue: $43.4B (+76.1%)
Est. EPS: $0.93 (+66.4%) pic.twitter.com/HJoVYkNqOT
— Value Sense (@ValueSense_io) May 26, 2025

Analysts expect earnings of 73 cents per share according to FactSet polling. Revenue forecasts call for a 66% jump from the prior year to $43.3 billion.

Stifel analyst Ruben Roy believes demand for H200 chips and initial GB200 production ramps should drive results above consensus expectations. Roy maintains a Buy rating with a $180 price target.

“We would expect this set of results/outlook to drive sideways to modestly higher share price performance,” Roy wrote in a research note. He acknowledges some disruption from H20 chip sales restrictions in China during the quarter.

The AI boom continues to fuel demand for NVIDIA’s data center chips. Wall Street expects this trend to show up clearly in the quarterly numbers.

BofA Securities analyst Vivek Arya also maintains optimism about the stock. He keeps a Buy rating with a $160 price target despite near-term challenges.

China Sales Impact

CEO Jensen Huang disclosed that NVIDIA expects to lose $15 billion in sales due to tightened controls on H20 chip exports to China. This creates uncertainty around future guidance.

Current consensus expectations for second-quarter revenue sit around $46 billion. This reflects roughly a $2 billion hit from the H20 restrictions.

However, Arya warns the impact could be larger if China sales were concentrated earlier in the year. He suggests NVIDIA could lose as much as $7 billion in a single quarter.

This scenario would push second-quarter revenue down to $41 billion. The timing of original China shipment plans will determine the actual impact.

Arya noted a gap between NVIDIA’s reported $15 billion China loss and the $10-$12 billion in revised analyst expectations for fiscal 2026. Consensus revisions have lowered expectations further to $3.8 billion.

The analyst expects this gap could create a $4-$5 billion headwind in the second fiscal quarter. The exact timing of planned China shipments will be key.

Despite these headwinds, BofA remains bullish on NVIDIA’s position in global AI deployment. Arya suggests potential recovery in China sales later this year through new compliant product designs.

The analyst also looks for management confidence about gross margin recovery. Target margins in the mid-70% range for the second half compare to current consensus of 73-74% for the third and fourth fiscal quarters.

Strong rack-level product yields from the Blackwell division would support margin improvement. This would signal successful execution alongside strong demand.

Friday’s tariff-driven selloff pushed earnings concerns to next week. The company’s AI chip dominance faces a key test with Wednesday’s results and forward guidance.

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