Nvidia Corp (NASDAQ:NVDA, ETR:NVD) will report its fiscal first quarter earnings after markets close on Wednesday, May 28, and investor focus will be on the company’s ability to lift Blackwell sales to offset the loss of H20 chip sales in China due to the latest US export restrictions, according to Wedbush analysts.
The analysts wrote in a note that demand for H20 was running above expectations into early April, making the China ban a notable quarter-over-quarter revenue headwind, estimated at $3 billion to $4 billion.
However, Blackwell appears to be ramping faster than anticipated after a rocky start, and early indications suggest shipment strength could support both topline and potential gross margin outperformance, depending on the size of any H20-related inventory charges.
The analysts maintained their Q1 revenue estimate of $43 billion, in line with consensus and Nvidia’s guidance. This marks a 66% year-over-year increase.
“We remain comfortable with our Q1 and consensus estimates at $43 billion, particularly with Nvidia having consistently embedded some conservatism into forecasts during the last few years of explosive growth, and also see the apparent improvement in Blackwell shipments as potentially suggesting some room for gross margins to outperform expectations,” they wrote.
Wedbush remains cautiously optimistic about Nvidia's ability to hit or exceed the $46.3 billion Q2 consensus revenue estimate despite China-related pressure.
“But we also believe Nvidia's Q2 revenue outlook matters less, as investors become more confident around Nvidia's intermediate term growth outlook following recent announcements around planned AI data center investments,” they added.
They noted that investor confidence is being buoyed by a surge in AI infrastructure investment.
“We believe a confluence of announced spending plans are mitigating any intermediate-term concerns for investors and likely create upside to our current 2026 numbers, assuming they are layered on to continued healthy cloud service provider capital expenditures,” they wrote.
Cloud service providers have reiterated or increased their capex plans, while emerging AI infrastructure players like CoreWeave and Nebius are guiding to aggressive growth. Sovereign and hybrid efforts, such as Saudi Arabia, the UAE, and StarGate, further add to a strong multi-year spending backdrop.
Wedbush maintained its ‘Outperform’ rating on Nvidia ahead of its earnings, citing confidence in the chipmaker’s forward trajectory. They also repeated their price target of $175, implying upside from its share price of $133 on Thursday afternoon.