Investing.com -- Deepwater Asset Management’s Managing Partner, Gene Munster, recently shared his insights on Nvidia (NASDAQ: NVDA )’s forthcoming earnings release, highlighting the impact of U.S. chip restrictions on China and the potential for the ongoing artificial intelligence (AI) buildout.
According to Munster, investors should expect three key takeaways from Nvidia’s earnings results for April and guidance for June. Firstly, the U.S. chip restrictions on China are likely to reduce Nvidia’s revenue by approximately $15 billion over the next three quarters. This, however, sets up easier year-on-year comparisons for calendar year 2026 (CY26) in China. Secondly, the AI expansion is still in its early stages and could partially offset the effects of the export curbs. Lastly, the revenue growth in CY26 is expected to surpass the current Street expectation of 24%.
The U.S. chip curbs are anticipated to lead to downward revisions in Street revenue growth estimates for calendar year 2025 (CY25), from the current expectation of 56% to around 40% year on year. Despite this, underlying GPU demand continues to soar, which investors are likely to view as the most significant update.
In April, the U.S. government imposed new export controls, prohibiting the shipment of high-bandwidth memory (HBM) GPUs to China, effectively sidelining Nvidia’s H20 chip. This led to a one-time $5.5 billion write-off of inventory in the April quarter. Deepwater estimates that about 25% of Nvidia’s FY25 revenue, or $50 billion in CY25, was effectively China-related. This includes $20 billion through authorized channels of H20 sales and another $30 billion going to third parties, many stationed outside of China, that supply China with Nvidia GPUs.
To regain this revenue segment, Nvidia is reportedly fast-tracking a “Blackwell-lite” chip that could ship as soon as June, adding back about $5 billion in revenue each quarter it’s in the market. For the July guide, buy-side models have already marked revenue estimates down to roughly $38 billion, down $7 billion vs. the imprint estimates of $45 billion, to reflect the U.S. curbs.
Munster also pointed out that the demand from non-China customers is exceeding expectations, indicating that the dip is temporary and tied to export paperwork, not end-market weakness. The AI infrastructure spending ramp is intact, with xAI’s ‘Colossus’ data center reportedly targeting roughly one million Blackwell GPUs, which would account for about $30–$40 billion worth of Nvidia hardware over the next two years. If this goes through, xAI alone would account for almost 8% of revenue over the next two years.
Furthermore, Apple (NASDAQ: AAPL )’s plans to close the AI gap and step up investment from its current $5 billion AI run rate could add a new 2–4% customer to Nvidia’s book. The Street calls for 56% revenue growth in CY25 and just 26% in CY26, but hyperscaler capex plans suggest CY26 growth could accelerate.
In the long term, owning Nvidia remains the cleanest way to invest in the AI buildout, according to Munster. Street revenue expectations for CY26 are roughly $245 billion, but Deepwater believes they are 10% too low, implying Nvidia trades closer to 20x forward EPS once the upward revisions flow through. If management reiterates that late in CY25, revenue will re-accelerate as additional Blackwell supply hits the channel, then the multiple on Nvidia has room to expand.
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