Nvidia Earnings Report: Impact of Export Restrictions Looms
Investors are bracing for the potential impact of export restrictions on Nvidia's revenue growth, as the company reports its quarterly earnings. With a significant write-down on inventory and uncertainty surrounding export license requirements, the report will be closely watched for signs of how these factors will affect the company's future revenue.
Nvidia is set to report its quarterly earnings on Wednesday, with investors closely watching the impact of export restrictions to China on the company's revenue growth, which is expected to be $43.28 billion, a 66% increase from last year.
The company will take a significant $5.5 billion write-down on inventory for its H100 chip, the largest in the chip industry's history. Despite this, Nvidia's AI chip sales are driving massive growth, but the new export restrictions could potentially hit future revenue. Analysts predict a sharp deceleration in revenue growth, from last year's 250% to 53% in the current quarter and 53% for the full fiscal year.
The uncertainty surrounding the new export license requirements has led to concerns among investors, with Morgan Stanley analysts predicting a bigger hit than expected. Nvidia's shares have bounced back after a rough start to the year, but the impact of the restrictions remains unclear. The company's earnings report will be closely watched, with expected EPS of 0.73 on $43.2 billion revenue.
The earnings report will take center stage, along with Salesforce's earnings and the Fed minutes, which will provide clues on rate cuts and growth. The Fed minutes, due at 18:00 GMT, will be closely scrutinized for clarity on future rate cuts amid macro uncertainty and evolving tariff policy. A strong print and dovish Fed tone could potentially lead to increased volatility in the markets.
As the markets await Nvidia's earnings report, U.S. equity futures are marginally lower, with the Dow, Nasdaq 100, and S&P 500 futures down 0.07%, 0.03%, and 0.07% respectively. The report will be pivotal in determining the direction of the markets, and investors will be closely watching for any signs of impact from the export restrictions.