Nvidia to Slash Forecasts by $8B, Excludes China Amid U.S. Restrictions

- CEO Jensen Huang announces Chinese market exclusion from revenue forecasts. - Company anticipates $8 billion Q2 2025 sales hit due to U.S. export controls. Nvidia braces for an $8 billion sales hit in Q2 2025, as CEO Jensen Huang announced the company will exclude the Chinese market from its revenue forecasts. This decision stems directly from stringent U.S. export restrictions. On June 12, 2025, Reuters reported that Nvidia will exclude the Chinese market from revenue forecasts because of U.S. export restrictions. According to the report, these restrictions have already inflicted a substantial financial toll, with Nvidia having lost $2.5 billion in sales during its fiscal first quarter of 2025. Consequently, the company now anticipates an additional $8 billion sales hit in the second quarter, a projected loss attributed to curbs on its H20 AI chips for China. Reuters also noted that before these restrictions, Nvidia had recorded $4.6 billion in H20 chip sales in Q1, primarily because Chinese customers stockpiled these chips in anticipation of the controls. Previously, the Chinese market contributed approximately 12.5% to 14% of Nvidia's overall revenue. CEO Jensen Huang has also criticized the U.S. export controls, suggesting they are not achieving their intended goals. Furthermore, as reported by Reuters on June 12, Huang warned that these controls could inadvertently benefit Chinese competitors, such as Huawei, and cautioned that they might accelerate Chinese innovation in chip development. In response to these restrictions, Nvidia is exploring limited options for the Chinese market. For instance, the company is considering the development of new, compliant chips, which could potentially be a downscaled version of the RTX PRO 6000 (formerly B40) and might debut as early as the second half of 2025. However, until Nvidia finalizes and receives approval for a new product design, the company will effectively be unable to access China's significant data center market. To counteract potential revenue losses from the Chinese market, Nvidia is also focusing on growth in other regions by pursuing AI infrastructure deals in the Middle East, Europe, and Taiwan. While analysts acknowledge that these markets offer opportunities, they also caution that these markets may not fully replace the scale and growth potential of the Chinese market in the near term. For example, reports from April 2025 indicated that some analysts adjusted their fair value estimates for Nvidia following the announcement of heightened China restrictions, and they now project China's contribution to Nvidia's revenue will approach zero.