Nvidia Q1 Earnings Preview: Will Sales Growth Offset China Export Headwinds?

NVIDIA’s (NASDAQ:NVDA) Q4 2025 results showed impressive momentum with a 78% year-over-year revenue increase, driven primarily by its data center segment, while maintaining healthy gross margins of 73%. Recent geopolitical tensions have resulted in a substantial $5.5 billion write-down related to inventory and purchase commitments due to new export restrictions to China.

Key Highlights:

• Japan proposes importing $7 billion worth of US semiconductors, potentially benefiting NVDA and AMD (NASDAQ:AMD) amid trade talks with the Trump administration.
• NVIDIA’s strategy to develop China-compliant GPUs demonstrates its proactive approach to addressing regulatory challenges and sustaining its market presence in China. By adapting its product lineup to meet local regulations and market demands, NVIDIA can potentially reduce the impact of export restrictions, ensuring continued access and competitiveness in the region. This approach aligns with NVIDIA’s history of navigating regulatory environments and positioning itself to capitalize on growth opportunities, even amid geopolitical and trade complexities.
• The $500 billion AI infrastructure initiative positions the company to capitalize on the growing demand for AI computing resources across various industries. This investment could lead to the development of new products and services tailored to specific AI workloads, further entrenching NVIDIA’s leadership in the AI ecosystem.
• The new export restrictions on H20 chips to China pose a significant threat to NVIDIA’s market position in one of its largest markets.

NVDA Q1 earnings after market Wednesday May 28, 2025

Option Statistics

Put/Call ratio suggests the following three scenarios:

• With Put/Call ratio between 0.9633 to 0.6139 for the next four upcoming expiries, suggest that the overall option traders are long call.
• Lower earnings and guidance could trigger a sharp sell-off.
• Better than expected earnings and guidance would trigger a sharp rise.
• Option market is showing a large net positive Gamma at 140 strike versus net negative gamma exposure at 140 strike over the spectrum of May 2025 to December 2027.

Technical Analysis Perspective

• NVDA is hovering inside a large rectangle pattern on weekly charts.
• Prices held 85/84 base of the pattern in May ’24 and April ’25; cementing this level as a buying zone.
• The middle line of rectangle is holding on dips at 120/119.
• The upper resistance of the formation is coming into picture at 153.
• Expected range post earnings are 153 – 120.
• History suggests that a strong move above 120 (mid-line) has triggered a rise to 150/153 top end of the rectangle.
• NVDA has penetrated a falling trendline from Jan ’25 153 high to April ’25 86 low also supporting the upside move post earnings.

Weekly Candlestick Chart

NVDA Seasonality Chart

• NVDA closes 8 % higher in May, 75% of the time since 2006.

Whether you’re a novice investor or a seasoned trader, leveraging InvestingPro can unlock a world of investment opportunities while minimizing risks amid the challenging market backdrop.

***

Ali Merchant is a seasoned financial market professional with expertise in Technical Analysis, Treasury & Capital Markets, Trading, Sales, Research, Training, Fund & Relationship Management, Fintech, and Digitalization. He is a CMT charter holder and an active member of CMT Association, USA, American Association of Professional Technical Analysts, and CMT Association of Canada. He has worked on various roles and organizations in North America and the GCC, such as ABN Amro bank, Thomson Reuters, Refinitiv, MAK Allen & Day Capital Partners (WA:CPAP), and Bridge Information Systems.

He is the founder of TwT Learnings, provides financial market training.