Nvidia(US:NVDA) Hua Xia Shi Bao·2025-05-29 15:26Core Viewpoint - Nvidia faces significant challenges in the Chinese AI chip market due to U.S. export restrictions, which could lead to a gradual loss of market share to domestic competitors, despite strong overall performance driven by global AI demand [2][3][4]. Financial Performance - In Q1 of fiscal year 2026, Nvidia reported revenues of $44.062 billion, a 69% year-over-year increase, and a net profit of $18.775 billion, up 26% year-over-year [6][8]. - The company incurred $4.5 billion in costs due to inventory backlog and procurement commitments related to H20 products, with $4.6 billion in sales and an additional $2.5 billion in unfulfilled orders for H20 products [3][8]. Market Dynamics - The U.S. government's tightening of chip export regulations has directly impacted Nvidia, particularly its H20 product line, which now requires a license for export to China, leading to reduced demand [3][4]. - Nvidia's CEO emphasized the importance of the Chinese market, noting it as a critical platform for success in the global AI landscape, with a projected market size of $50 billion [3][4]. Product Strategy - Nvidia's export strategy has been reactive to U.S. policy changes, resulting in a gradual reduction in product performance from A100/H100 to the currently restricted H20, increasing the potential for domestic alternatives to capture market share [5][6]. - Domestic GPU products from companies like Huawei and others are becoming viable alternatives to Nvidia's H20, particularly in inference scenarios, where performance and cost-effectiveness are critical [5][6]. Future Outlook - Nvidia anticipates Q2 fiscal year 2026 revenues to reach $45 billion, reflecting an $8 billion reduction in revenue due to recent export restrictions on H20 products [8]. - Despite the challenges in the Chinese market, Nvidia's overall performance remains robust, with strong growth in data center revenues, which accounted for $39.112 billion, a 73% increase year-over-year [8].