Nvidia braces for $8B China hit in Q2 earnings

Nvidia is set to report its second-quarter earnings after market close on Wednesday, August 27, 2025, with investors closely observing the influence of U.S.-China trade policies and company’s response to evolving export restrictions.

The American technology company, founded in 1993, warned of an $8 billion revenue loss in the second quarter due to the initial ban from Trump’s administration on AI chip sales to China implemented in April, 2025.

Despite the initial ban, U.S. President Donald Trump reversed the ban in July as part of a broader trade negotiation, enabling Nvidia to recommence sales of its China-specific H20 chip.

However, to resume sales in China, Nvidia needs to follow a new condition, i.e., forfeiting 15% of its China-derived revenue to the U.S. government.

Nvidia's stock has remained resilient, rising 35% year-to-date and briefly pushing its market capitalization above $4 trillion in July.

For Q2, experts project adjusted earnings per share of $1.01 on revenue of $46.2 billion, representing year-over-year growth of 49% and 53%, respectively.

It is expected that:

• Data center revenue will reach $41.2 billion, driven by demand for AI accelerators
• Shipments of the new GB200 superchip are soaring, with manufacturing yields nearing 85%

Another major factor that can impact the Q2 earnings is the uncertainty of the Chinese market. Recently, China has warned about the “backdoor risks” in Nvidia’s chips that could further complicate sales efforts.

To address this, Nvidia is also developing a new chip, namely B30A, though it requires approval from the Trump administration. CEO Jensen Huang has been in discussion with U.S. officials, but the results are uncertain.