Investing.com -- Nvidia’s near-term upside may be more limited than in previous quarters due to the ongoing China AI chip ban and manufacturing constraints tied to its high-end GB200 systems, according to a note from KeyBanc Capital Markets.
“We expect NVDA to report more modest upside to F1Q (April) results and F2Q (July) guidance given headwinds associated with the AI China chip ban and continued supply constraints associated with GB200 NVL72,” KeyBanc analysts wrote.
Despite these challenges, the firm said Nvidia (NASDAQ:NVDA) plans to mitigate the impact by introducing a new AI GPU designed to comply with U.S. export restrictions.
“We do believe this will be partially offset by a new China-compliant AI GPU that NVDA is developing that is non-HBM based (uses GDDR7 instead),” KeyBanc said.
The firm adds that the chip, based on Nvidia’s RTX6000 workstation GPU, could ship around 1 million units at an average selling price of $8,000—generating an estimated $8 billion in revenue to help offset the $14 billion hit from the blocked H20 GPUs.
Meanwhile, Nvidia’s ability to scale production of its GB200 NVL72 racks is said to remain a concern.
“ODMs continue to struggle with the production of these racks,” KeyBanc wrote, noting that first-quarter shipments were below 1,000 units and second-quarter expectations are for 3,000 to 4,000—well short of original targets.
“We believe the supply chain is still targeting production of 30K GB200/GB300 racks for FY26, but given the ongoing manufacturing struggles, we are increasingly concerned about whether this target is achievable,” added the firm.
KeyBanc slightly raised its first-quarter revenue estimate to $44.2 billion but lowered its second-quarter projection and trimmed full-year 2026 and 2027 estimates due to these ongoing headwinds.