PHLX Semiconductor Index tumbles 6% after Nvidia's Q1 revenue shows China export strain

The PHLX Semiconductor Index (SOX) experienced a sharp decline of over 6% following Nvidia's first-quarter earnings report, marking its steepest drop since January's market panic.

Nvidia's revenue from China is projected to reach $6.2 billion, representing more than 14% of total revenue in the quarter, according to Wall Street consensus estimates tracked by Bloomberg.

However, the company faces significant challenges due to U.S. export restrictions. Nvidia CEO Jensen Huang described the Trump administration's export ban on its H20 AI chips as 'deeply painful.' The company disclosed in an April regulatory filing that it will incur $5.5 billion in charges this quarter related to inventory write-downs caused by these restrictions.

Nvidia has developed specialized H20 chips, based on its prior-generation Hopper AI GPUs, specifically for export to China to comply with U.S. export controls.

Overall, Nvidia's total revenue is estimated to hit $43.3 billion, with U.S. revenue expected to grow by a more modest 60% to $21.6 billion, Bloomberg data shows.

Nvidia's earnings are closely watched by investors as a key indicator of AI demand and investment trends, making the report a significant catalyst for AI infrastructure stocks.

"Nvidia CEO Jensen Huang has called the Trump administration's export ban on its H20 chips 'deeply painful.'"
"Nvidia said in an April regulatory filing that it will incur $5.5 billion in charges in its first quarter from the new restriction due to a write-down in inventory."
"The PHLX Semiconductor Index (SOX) tumbled more than 6% after Nvidia’s last report, its biggest decline since January’s panic caused the index to nosedive."

The PHLX Semiconductor Index plunged over 6% following Nvidia's Q1 revenue report, which revealed a $6.2 billion revenue hit from China amid U.S. export restrictions. Nvidia faces a $5.5 billion charge due to inventory write-downs linked to the export ban on its H20 AI chips.