Nvidia Hit by $20 Billion China Meltdown, BofA Warns Ahead of Earnings

Nvidia’s (NASDAQ:NVDA) revenue from China is evaporating, with Bank of America estimating a $15 billion to $20 billion annual hit as U.S. export controls tighten. The loss piles pressure on the chipmaker heading into its May 28 earnings release, according to a Tuesday research note.

Ben Reitzes of Melius Research said Nvidia’s new products are amazing, but added the company must grow fast to make up for the lost demand. Bank of America’s Vivek Arya called the China situation a vanishing act, noting that hyperscaler capital expenditure will be key to bridging the revenue gap.

Despite a 15% drop in Nvidia’s shares this year, analysts remain bullish. Reitzes described the AI race as existential for giants like Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), and Alphabet (NASDAQ:GOOG), with demand for Nvidia’s chips still strong, even as some firms develop custom silicon. New launches like the GB300 and Vera Rubin chips are seen as crucial in navigating tightening regulations.

Arya warned the long-term market opportunity for Nvidia’s data center business may have shrunk 20%. Still, Bank of America expects Big Tech capital spending to surge 35% in 2025, a trend that could work in Nvidia’s favor.

Nvidia is forecast to report $43.12 billion in revenue and 89 cents in EPS for the upcoming quarter.

This article first appeared on GuruFocus.