Nvidia's Q2 Earnings: $8 Billion China Impact and Semiconductor ETF Exposure Under the Microscope

Nvidia's Q2 earnings report is expected to reveal an $8 billion impact from US chip-export restrictions to China, affecting its revenue streams and potentially pulling down semiconductor ETFs. Nvidia's presence in ETFs such as VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX) will be closely watched. A significant China disappointment may lead investors to rotate out of high-exposure names like AMD and Marvell Technology.

Title: Nvidia's Q2 Earnings Report: $8 Billion China Impact and Semiconductor ETF Implications

Nvidia Corp (NASDAQ:NVDA) is set to release its second-quarter earnings report, with a significant focus on the $8 billion impact anticipated from U.S. chip-export restrictions to China. This figure, initially mentioned during the company's first-quarter call, will be closely scrutinized as it has the potential to influence not only Nvidia's financial performance but also the broader semiconductor ETF landscape.

Nvidia's extensive presence in various ETFs, such as the VanEck Semiconductor ETF (NASDAQ:SMH) and iShares Semiconductor ETF (NASDAQ:SOXX), means that any notable shift in the company's performance could have ripple effects across these funds. The options market is already preparing for potential volatility, with traders expecting a possible $260 billion swing in Nvidia's market cap after earnings, according to Reuters [1].

The U.S.-China trade war has been a rollercoaster for Nvidia. The company initially faced a ban on chip exports to China in April, followed by a repeal in July, and then a 15% tariff on sales into the country in August. These regulatory changes have led to doubts about the sustainability of Nvidia's revenue streams and have raised concerns about the broader semiconductor sector [2].

While Nvidia's data center segment is expected to contribute $41.2 billion in revenue this quarter, the impact of the China restrictions could overshadow this positive momentum. A significant China disappointment may prompt investors to rotate out of high-exposure names like Advanced Micro Devices Inc (NASDAQ:AMD) and Marvell Technology Inc (NASDAQ:MRVL), even if their China risk is lower [1]. Conversely, chipmakers with larger domestic footprints, such as Intel Corp (NASDAQ:INTC), might benefit if tariff rhetoric becomes more significant.

Nvidia's earnings report is expected to provide insights into the company's ongoing efforts to navigate the complex trade landscape. The company has been working on a new, more powerful AI chip for China, believed to be called the B30, which aims to comply with US export restrictions while addressing Beijing's security concerns [2]. Investors will be closely watching for updates on this project and any potential guidance on the company's long-term prospects.

In summary, Nvidia's Q2 earnings report is set to be a critical moment for the semiconductor sector. The $8 billion impact from China restrictions will be a focal point, with potential implications for Nvidia's stock and the broader ETF landscape. Investors and financial professionals should closely monitor the report for insights into the company's strategy and the broader semiconductor market dynamics.

References
[1] https://finance.yahoo.com/news/nvidias-anticipated-8-billion-china-184500273.html
[2] https://www.cnn.com/2025/08/27/tech/nvidia-earnings-china-trump