Summary
- We analyzed the impact to Nvidia following the confirmation by the company of the U.S. government’s restrictions on data center product sales to China.
- We examined revenue breakdown by geographic segment which represented 26.4% of revenues from China, but Nvidia only guided an impact of 6% for its upcoming quarter.
- We examined the share of cloud service providers where Chinese companies accounted for 13% share and estimated a revenue impact of 6.4% to Nvidia.
- We believe Nvidia and AMD face a limited short-term impact in terms of restrictions but could see a longer-term threat in the future with the rise of Chinese startups.
- Notwithstanding, we believe the share price of Nvidia is very oversold, which presents a strong buying opportunity.
For further details see:
Nvidia: U.S. Restrictions Lower Revenue Growth By 5%