Core Insights - NVIDIA Corporation (NVDA) is projected to lose approximately $8 billion in revenues in Q2 of fiscal 2026 due to new U.S. government export restrictions on its H20 AI chips to China, resulting in the slowest revenue growth in nine quarters at 2% sequential growth [1][10] - The company had to write down $4.5 billion in unsold inventory and future chip orders, highlighting its significant reliance on the Chinese market for sales [2][10] - NVIDIA is attempting to mitigate revenue losses by expanding into other regions, focusing on AI infrastructure deals in Saudi Arabia and the European Union, but these markets cannot fully replace the scale and growth potential of China [4][5][10] Company-Specific Challenges - NVIDIA's CEO, Jensen Huang, indicated that the export controls could allow local Chinese chipmakers to catch up more quickly, posing a risk to NVIDIA's market position [3] - Rivals such as Advanced Micro Devices (AMD) and Intel are also affected by the U.S. export restrictions, with AMD estimating a loss of around $800 million due to the ban on its MI308 GPUs, which compete with NVIDIA's offerings [6][7] - Intel faces challenges with its Gaudi 3 chips, which were part of its expansion strategy into China, and the export restrictions may hinder its ability to meet volume targets [8] Financial Performance and Valuation - NVIDIA's shares have increased by approximately 7.1% year-to-date, outperforming the Zacks Semiconductor – General industry's growth of 6% [9] - The company trades at a forward price-to-earnings ratio of 30.48, slightly below the industry average of 32.79 [11] - The Zacks Consensus Estimate for NVIDIA's fiscal 2026 and 2027 earnings suggests year-over-year increases of about 42% and 31%, respectively, with recent upward revisions in earnings estimates [12]