Piper Sandler analyst Harsh Kumar has projected a potential data center annual revenue loss of $9.8 billion for Nvidia Corp. (NASDAQ:NVDA) due to a slowdown in capital expenditure (capex) and an ongoing decoupling from China.
What Happened: Kumar’s latest sensitivity analysis indicates a “worst case” scenario where NVIDIA’s data center revenues could suffer a significant blow, amounting to 6.45% of the company’s total annual revenue from this segment. This could result in an EPS hit of around $0.40, according to a report by Wccftech.
Kumar’s worst-case scenario estimates NVIDIA shares could drop to $76.25, based on a 25x earnings multiple. In contrast, Piper Sandler’s best-case outlook sets a target of $126.75. At present, NVIDIA stock is trading slightly below $114.
This analysis comes after a separate study by market research firm TechInsights, which pointed out alarming signs for the wider semiconductor industry amidst ongoing tariff-related tensions between the U.S. and China. TechInsights anticipates a potential 10% contraction in the global semiconductor market by 2025 if the current tariff rates persist.
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Why It Matters: The projected loss comes in the wake of NVIDIA’s ongoing efforts to redesign artificial intelligence chips for major Chinese tech firms. This move was prompted by the potential multibillion-dollar losses that could result from tightened U.S. export restrictions on its H20 chip in April.
NVIDIA previously stated it anticipates taking charges of up to $5.5 billion in fiscal Q1 2026 due to “inventory, purchase commitments, and related reserves” tied to its China-specific H20 GPU.
After the Trump administration imposed curbs on H20 AI chips, CEO Jensen Huang travelled to Beijing and met Chinese officials.
Furthermore, China’s search for domestic alternatives to NVIDIA’s H20 chip has led to Huawei Technologies preparing to start mass shipments of its advanced 910C artificial intelligence chip to Chinese customers, as reported in April 2025. This move by Huawei could further impact NVIDIA’s market share and revenue in China.
Nvidia stock slid 0.59% to close at $113.82 on Monday. On a year-to-date basis, it lost more than 17%, as per data from Benzinga Pro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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