Nvidia's Tepid Forecast Sparks AI Slowdown Concerns Amid Rising Chinese Competition

Nvidia Gives Lackluster Forecast, Stoking Fears of AI Slowdown

Nvidia Corp., the world's most valuable publicly traded company, gave a tepid revenue forecast for the current period, fueling concerns that a massive run-up in artificial intelligence spending is slowing. Sales will be roughly $54 billion in the fiscal third quarter, which runs through October, the company said in a statement Wednesday. Though that was in line with the average Wall Street estimate, some analysts had projected more than $60 billion. The forecast excluded data center revenue from China, a market where it has struggled with US export restrictions and opposing pressure from Beijing.

Nvidia CEO says AI boom far from over after tepid sales forecast

SAN FRANCISCO, Aug 28 (Reuters) - Nvidia (NVDA.O), opens new tab CEO Jensen Huang on Wednesday dismissed concern about an end to a spending boom on artificial intelligence chips and said opportunities will expand into a multi-trillion-dollar market over the next five years. Despite Huang's upbeat view on AI demand, shares of the chip designer fell 1.56% to $178.77 in premarket trading on Thursday as the company's tepid third-quarter sales forecast disappointed investors. The sales outlook excluded potential revenue from China, a move that underscores the uncertainty caused by the Sino-U.S. trade tensions. Huang sought to reassure investors rattled by indications of slowing growth at the chipmaker at the center of the investment frenzy. The founder and CEO's bullish outlook contrasts with recent signs of fatigue in AI-focused stocks and comments from industry leaders about overheated investor enthusiasm. "A new industrial revolution has started. The AI race is on," Huang said. "We see $3 trillion to $4 trillion in AI infrastructure spend by the end of the decade." Pushing up the chipmaker's shares are expectations of demand from Big Tech, data center owners known as hyperscalers and China. "The mega caps are the ones propelling a lot of the capex that Nvidia is benefiting from. But obviously Nvidia still is growing, is able to sell," said Matt Orton, head of advisory solutions at Raymond James Investment Management. "If anything, this just highlights that there's a lot of durability to this (AI) trade... The businesses of these hyperscalers can continue to accelerate, and you're not seeing any sort of sign of a slowdown being reflected in the results of Nvidia." While Nvidia shares have outpaced a roughly 10% gain in the broader market (.SPX), opens new tab, AI-facing stocks have shown signs of fatigue. OpenAI CEO Sam Altman set off alarm bells this month when he said investors may be "overexcited" about AI. On Wednesday, Huang sounded unperturbed. "The more you buy, the more you grow," Huang said, arguing that Nvidia's technological advances allow customers to process increasing amounts of data while using less energy. "The buzz is: everything sold out." Case in point: A customer outside China bought $650 million worth of Nvidia's H20 reduced-capability chip aimed at the Chinese market in the latest quarter, the chipmaker said. Huang based his forecast in part on the $600 billion he expects for data center capital spending this year from major customers such as Microsoft (MSFT.O), opens new tab and Amazon (AMZN.O), opens new tab. For a data center costing as much as $60 billion, Nvidia can capture about $35 billion, Huang said. Nvidia and Huang, however, see little reason for AI chip profit growth to slow as second-quarter net income surpassed the fiscal third-quarter profit of Big Tech peer Apple (AAPL.O), opens new tab. The company's high-end Blackwell chips are largely spoken for based on 2026 forecasts from its biggest customers. Its earlier-generation Hopper processors are being snapped up too. "When you have something that is new, and it's growing as fast as it is, and with all of the huge capex announcements from the hyperscalers, it's evidence that we're in the early stages" of the AI boom, said Globalt Investments portfolio manager Thomas Martin. Reporting by Max A. Cherney in San Francisco; additional reporting by Siddarth S in Bengaluru; Editing by Peter Henderson, Sayantani Ghosh, Christopher Cushing and Arun Koyyur Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence Max A. Cherney Thomson Reuters Max A. Cherney is a correspondent for Reuters based in San Francisco, where he reports on the semiconductor industry and artificial intelligence. He joined Reuters in 2023 and has previously worked for Barron's magazine and its sister publication, MarketWatch. Cherney graduated from Trent University with a degree in history.

Did Nvidia Just Pop an AI Bubble? Here's What the Market Says

Lukewarm second quarter results from AI powerhouse Nvidia (NVDA) Wednesday have Wall Street bros and the analysts that love them catching all kinds of feelings. Long a bellwether for how the market views AI in general, the largest company in the world carries enough weight in its $1 trillion valuation to move entire indexes, let alone the tech sector. That was especially the case over the last two weeks, when handwringing over what Nvidia would say in its second quarter results on Aug. 27 reached a fever pitch. The TLDR take on what all that was and why it matters? Numbers that showed strong growth from Nvidia were good for AI's continued bull run; weak numbers would mean that the casino-level spending on AI is finally showing signs of a slowdown. With investors like the U.S. government and Meta, Google, and the private market plowing billions into AI and its tools, it's always wise to pause for a minute and see what the short-term projections may be for such a hot sector. Well, as is usually the case with analyzing Wall Street, that really depends on who you ask. Overall, Nvidia managed to surpass market consensus, with reported Q2 sales of $46.74 billion, up 56% from a year ago, a number that eked past the market's projected consensus of $46.23 billion. Of that number, roughly $41.1 billion was from the company’s data centers business, which missed its expected target of $41.29 billion. For some tech sector watchers, that disparity (while considered relatively minor in other businesses) was enough to raise alarm bells that a spending Ice Age could be drawing nigh. “[Data center operator spending] could tighten at the margins if near-term returns from AI applications remain difficult to quantify,†Emarketer analyst Jacob Bourne wrote in a note to investors. To others, however, Nvidia's results were actually a reassuring sign that AI spending and the investors, banks, and VCs funding it have very little to fear from these particular results. "I don't care about the seemingly sky-high market capitalization that these stocks have. I'm simply trying to put a valuation on a company that makes what you need to become one of the serious players in AI," CNBC's Jim Cramer said after parsing earnings. "I learned not to question Amazon or Microsoft or Google or Meta or even Tesla â€" the big customers â€" a long time ago. They know more than I do â€| I'm just grateful they let me along for the ride," Cramer added. Of course, debate about the bubble wasted no time flourishing across social media Wednesday, with boosters and doubters posting everything from super-long treatises to hot take memes on how close to calamity or calm we are now. It's probably best to hedge your bets on AI as a never-ending juggernaut of growth. With data center and growths numbers like the ones posted Wednesday, the outlook surrounding Nvidia’s earnings has heightened fears that the current surge in investment in artificial intelligence (AI) systems may be unsustainable in the long run. You can now expect a growing chorus of analysts to question whether valuations are justified by actual revenue potential, especially amid broader economic uncertainties. Nvidia's outlook for its business in China was also a key part of its Q2 guidance and highlighted two potentially major hurdles to growth: Disappointing numbers reported from that region, and a continuing uncertainty on what it might expect from American domestic policies. Specifically worrisome is that, despite the Trump administration recently easing restrictions on exports of certain AI chips to Beijing, this policy shift has yet to produce a meaningful recovery in Nvidia’s revenue from the region. The lingering difficulties in the Chinese market also continue to cast a shadow over the company’s growth prospects, highlighting how geopolitical tensions remain a significant headwind for the semiconductor giant.

AI and Nvidia have been bright spots in an uncertain economy, but there are doubts now

Nvidia has become a symbol of AI in America, especially in the stock markets. Justin Sullivan/Getty Images North America hide caption The artificial-intelligence bubble has been propping up the stock market and the broader economy for a while now. What happens if it bursts? That's been the question circling Wall Street recently, as Big Tech companies face both unprecedented political pressures from the White House -- and new doubts about all the money that's pouring into AI investments. This past week, AI darling Nvidia reported blockbuster financial results that beat analysts' expectations. But investors weren't impressed. Shares in the chip company dipped 4% in the two days since that report. Nvidia is still the world's most valuable company, and it alone makes up about 8% of the S&P 500. It and the other so-called "Magnificent Seven" tech companies are contributing both to real economic growth -- by investing billions and billions of dollars in developing artificial intelligence -- and to the stock markets that Americans rely on for their retirement investments and other savings. The S&P 500 is up almost 10% and the tech-heavy Nasdaq is up over 11% since the start of the year. That surge comes despite mounting uncertainty over the performance of the wider U.S. economy, the long-term effects of President Trump's sweeping tariffs, and the increased prices they are widely expected to cause for consumers. For businesses and investors, the promise of artificial intelligence has been a big economic bright spot amid all the other gloom. In this modern-day gold rush, Nvidia and its competitors are selling the picks and shovels: the semiconductors that many tech companies are using to develop AI systems and capabilities. Those companies, in turn, are selling their AI products to all the non-tech companies that are prospecting for gold -- that is, looking for ways that AI can make their operations cheaper or more efficient. But very few have seen results yet. The vast majority -- 95% -- of companies that are experimenting with AI aren't seeing any revenue from it, according to a new survey from MIT. The publication of its findings last week sent the Nasdaq into a days-long slump. "Most companies are not getting the benefit [of investing in artificial intelligence], but they feel like they have to keep trying because of the magnitude of disruption that's coming their way," says Gil Luria, who covers tech companies as a managing director for D.A. Davidson. Despite beating analysts' expectations, and turning a handy $26.4 billion profit in its second quarter, Nvidia's latest quarterly results disappointed Wall Street. Even outside of the AI bubble, Nvidia has become a nexus for the bigger issues facing U.S. businesses -- including mounting concerns over the future of free-market capitalism, and how much control President Trump is trying to exert over private companies. Nvidia has been in the headlines this month for the extraordinary deal Trump announced with the company: He says Nvidia has agreed to pay the U.S. government a cut of sales of a certain chip in China, in exchange for letting the company do business there. (Nvidia said this week that it has not sold any of that chip in China in the past quarter.) Trump announced that deal just before his administration said it would take a 10% stake in Intel, and that it is considering seeking similar deals in other industries. Those extraordinary arrangements have raised alarm bells in corporate America about how the U.S. government is exerting more control over the free markets. Meanwhile, investors are also still waiting to see the full impact of Trump's sweeping tariffs on the broader economy. But Pam Hegarty, who invests in tech companies as a lead portfolio manager at BNP Paribas, says Wall Street seems to be getting used to the political chaos around some of the artificial-intelligence industry. "The tariffs and export controls have definitely added a lot of uncertainty, particularly for the semiconductor sector. But investors are starting to absorb that uncertainty," she says, adding that she's still optimistic about the broader AI boom: "The overall opportunity is still out there."

Nvidia's China-based rival posts 4,300% revenue jump as chipmakers' earnings reported no H20 chip sales to the country

Cambricon, a China-based semiconductor firm, posted record profit in the first half of the year, along with revenue that surged roughly 4,300%. The earnings, released late Tuesday, serve as an example of Nvidia's growing local competition in China, as the government and market seek alternative chipmakers to gain traction in the region. Nvidia's business in China has been tied up in U.S. export restrictions and geopolitical tensions, and the tech behemoth recorded no H20 chip sales to China in the second quarter, per its earnings release yesterday. Cambricon's first-half revenue surged to 2.88 billion Chinese yuan ($402.7 million), the company reported this week. The Chinese upstart, created by two "genius brothers," is partially state-owned and headquartered in Beijing. The company's stock is now China's most expensive, overtaking liquor company Kweichow Moutai. Still, the whopping revenue growth is a far cry from Nvidia, which reported $46.7 billion in the second quarter alone. But experts tell Fortune Cambricon's growth reflects a larger push to create local Nvidia rivals in China -- especially as the tech giant deals with increased export restrictions under the Trump administration. "Nvidia apparently has a better overall offerings in terms of the hardware in China, but because of the export controls right now they cannot sell basically to China," Ray Wang, research director of semiconductors, supply chain, and emerging tech at The Futurum Group, told Fortune. "They leave a big market void for a Chinese competitor to fulfill." Wang said large China tech companies like Huawei and SMIC are "catching up rapidly" to Nvidia in terms of both product and quality, as well as production capacity. "That's a serious concern for both Nvidia and the U.S. government's agenda in terms of... dominating AI globally," he said. Earlier this year, the U.S. enforced stricter export controls to China, at one point banning H20 chips -- which are known to be less powerful than Nvidia's AI chips -- from being sold to the country. In July, the ban was lifted, but it also allowed time for companies to invest in innovation. "The problem with banning [H20 chips] is you're effectively handing the AI market and training over to companies like Huawei or Cambricon or... other local players," Stacy Rasgon, senior analyst of U.S. semiconductors and semiconductor capital equipment at Bernstein Research, told Fortune. Rasgon pointed out that, in Cambricon's case, the roughly 44-fold revenue increase to $402.7 million in the first half of this year means the company went from "tiny to small." He said he's less focused on the percentage growth than the reason behind it. "There's a big push in China for self-sufficiency," Rasgon said. Cambricon's record profit was helped by a wave of demand for Chinese chips after Beijing encouraged using local technology, citing security concerns and uncertainty over the Trump administration's export curbs. The most recent catalyst for Cambricon's surge came from AI startup DeepSeek, which said last week its latest model comes with a feature that can optimize locally-made chips. Last week, the Chinese government told its tech companies to stop using Nvidia's H20 chips after U.S. Commerce Secretary Howard Lutnick said China would only receive the company's "fourth best" chip when speaking with CNBC, only adding fuel to the fire. "You want to sell the Chinese enough that they get addicted to the American technology stack," Lutnick added. Despite technology advancements by Nvidia rivals amid geopolitical tensions, demand for its H20 chips remain -- even in the face of regulatory hurdles the company is navigating. In its second-quarter earnings, Nvidia reported no H20 sales to China-based customers. In its earnings call on Wednesday, Chief Financial Officer Colette Kress estimated $2 billion to $5 billion in H20 revenue this quarter should "geopolitical issues reside." Nvidia did not include any revenue from H20 chips in its third quarter guidance, which tops analysts' expectations of $53.14 billion at $54 billion, plus or minus 2%. "It was inevitable there would be more entrants into this market," Sebastien Naji, a research analyst at William Blair, told Fortune. "Near-term, I think the risks on the regulatory front are more impactful than increased competition." Nvidia previously warned that if not for the U.S. chip export restrictions, its topline guidance for the July quarter would have been $8 billion higher. "I think the stock does not have that priced in, in terms of if that revenue were to go away," Stephen Callahan, trading behavior analyst at Firstrade Securities, told Fortune before Nvidia's earnings call on Wednesday. CFO Kress also said during the earnings call over the past few weeks, a "select number" of China-based customers received licenses for H20 chips, though none have been shipped based on those licenses. Kress also mentioned the U.S. government and Nvidia haven't finalized a recent agreement that will require the chipmaker to share 15% of the revenue it makes through H20 chip sales to China. There are already some Chinese products that outperform Nvidia's H20, analyst Rasgon said. He said he expects greater competition in the local market to only catalyze chip innovation in China. "Nvidia is never going to be allowed, probably, to sell better parts in China," Rasgon said. "So for the Chinese, it takes time, but they're going to work on improving their own stuff. And over time, maybe that gap closes." Nvidia CEO Jensen Huang has long complained about U.S. export controls, saying they will only galvanize local players to innovate in the chipmaker's absence. "The China market, I've estimated to be about $50 billion of opportunity for us this year if we were able to address it with competitive products," Huang said during the second-quarter earnings call. But not only does Nvidia look to resume H20 chip sales in China, the company also wants to expand its product line by introducing the high-performance Blackwell chip in the country, should the U.S. agree. "We continue to advocate for the U.S. government to approve Blackwell for China," Kress said during the earnings call. The company aims to "win the support of every developer" in highly-competitive markets, she added, so Nvidia technology can be the world's gold-standard. "You kind of need a Blackwell chip [in China], even though it's going to be performance-laden in nature, relative to everything else in the market," Angelo Zino, SVP and technology equity analyst at CFRA, told Fortune. While Zino said the H20 "probably isn't going to give you enough to offset or get back the revenue" the company had a couple of quarters ago, introducing a Blackwell chip in China just might.

Nvidia CEO Jensen Huang advises AI customers to 'pace themselves' after GPU clusters sell out, but the company says it's going to continue to scale up

What am I humming? Bubble Pop by HyunA, for no particular reason. Nvidia has been on a tear. Just in case you've been living under a nice mossy rock the past few years, the advent of generative AI has ushered in a golden era for the company. Let's talk some truly eye-watering facts and figures: during Nvidia's Q2 2025 earnings call, the company reported a total revenue of $46.7 billion. Okay, so it's more like a diamond-encrusted-with-foie-gras-on-the-side era, but it's been far from smooth sailing. As such, with the next-gen Rubin architecture just off the horizon and data centre demand continuing to grow, Nvidia CEO Jen-Hsun Huang said during the aforementioned earnings call, "We advise our partners, our customers to pace themselves." It's bizarre to hear the head of a company making bank say anything to the effect of 'actually, hold your horses,' but Huang advises that Nvidia's AI customers build "data centers on an annual rhythm." Why? There are more than a few potential reasons, ranging from the ever-changing tariff situation in the US, to potential strain on what may well be an AI bubble. But, specifically referring to Nvidia's H100 and H200 GPU clusters often used in AI data centres, Huang had this to say: "Right now, the buzz is -- I'm sure all of you know about the buzz out there. The buzz is everything sold out." We've also seen stock supply issues on the gaming side. Early supplies of RTX 50-series GPU stock left much to be desired, making it an absolute mission to find a card at MSRP only a few months ago. Still, gaming alone raked in $4.3 billion for Nvidia, according to the Q2 2025 earnings call. Thankfully, it's a little easier to find a 50-series card at a reasonable price now, as our best graphics cards deals guide can attest. However, it's worth noting that Nvidia's AI revenue vastly overshadows even the billions made by its gaming division. As such, Huang kept these priorities in sight as he reassured investors that Nvidia was taking steps to avoid similar scarcity with Rubin later this year. In his closing remarks, Huang said, "Our next platform, Rubin, is already in fab. We have six new chips that represent the Rubin platform. They have all ticked up at TSMC. Rubin will be our third-generation NVLink rack scale AI supercomputer, and so we expect to have a much more mature and fully scaled up supply chain." Given the constantly shifting US tariff situation and its far-reaching effects on the wider geopolitical stage, it's hard to comment on the projected success of even the best laid plans. And then there's the fact that major player Meta is actually looking to downsize its own AI division -- could this herald the shape of things to come for AI's place within big tech? If Huang suspects as much, he didn't let on, instead saying, "Blackwell and Rubin AI factory platforms will be scaling into the $3 trillion to $4 trillion global AI factory build out through the end of the decade."

Nvidia: Tech bubble seems safe so long as AI demand remains high

For all the trillions being spent in the pursuit of artificial intelligence (AI) it still cannot answer the existential question: is AI a truly transformative technology, akin to the railways, or a bubble about to burst, taking global markets with it? In the absence (for now) of a definitive digitally-generated answer, the performance of chip-maker Nvidia is a good proxy. The world's largest company by value has released quarterly results that give clues to the future, as well as evidence of current performance. Nvidia's growth is fundamentally linked to AI. It made its name developing the graphic processing chips (GPUs) that powered gaming and by 2022 was turning over $9bn. A tidy sum, but soon to be eclipsed as CEO Jenson Huang spotted the potential of his GPUs in the nascent AI technology and threw the entire company behind its development. After ChatGPT provided public proof-of-concept for large language AI models (LLMs) in early 2023, Nvidia took off. Its valuation trebled last year and has risen 35% already this year on the way to a market value of $4.4trn. That's double the value of every company in the FTSE100 combined and getting on for 25% larger than total UK GDP. With stratospheric valuations come similarly lofty expectations however, which helps explain why, despite reporting $46.7bn in second quarter revenue and $26.4bn in profits, both ahead of expectations and up more than 50% year-on-year, markets were initially unimpressed and Nvidia shares dipped 3% in post-close trading. That sentiment may not last, but could be explained by questions over Nvidia's access to Chinese markets, blocked until recently by Donald Trump. Huang has done a deal with the US president to hand over 15% of its revenues from sales to Beijing but until it is inked Nvidia is neither booking or forecasting Chinese revenue. The vibes around AI have also shifted in recent months. A recent report from the Massachusetts Institute of Technology found scant evidence of meaningful returns on AI investment despite huge spending across the corporate landscape. And after OpenAI's ChatGPT-5 launched to lukewarm reviews, its founder Sam Altman, one of the biggest beneficiaries of the hype, wondered out loud whether the market was over-heated. Despite the noise, Nvidia believes it has plenty of road left to run, and with good reason. Tech giants Google, Microsoft, Meta and Amazon and many others are all chasing the potential of AI, perhaps uncertain what it might ultimately deliver but desperate to be first to find out. That impetus is driving enormous investment in hardware. More than $41bn of Nvidia's Q2 revenues came from the sale of data centre equipment, and it predicts another $3tn-$4tn will be invested in AI infrastructure by the end of the decade. If anything on that scale is realised, then Nvidia and Jenson Huang will keep winning. Like the railroad pioneers who transported prospectors west during the California gold rush, it matters less that they strike lucky as long as they keep trying.

Nvidia gives lacklustre forecast, stoking fears of AI slowdown

Gift 5 articles to anyone you choose each month when you subscribe. Nvidia, the world's most valuable publicly traded company, gave a tepid revenue forecast for the current period, fuelling concerns that a massive run-up in artificial intelligence spending is slowing. Sales will be roughly $US54 billion ($83 billion) in the fiscal third quarter, which runs through October, the company said in a statement. Though that was in line with the average Wall Street estimate, some analysts had projected more than $US60 billion. The forecast excluded data centre revenue from China, a market where it has struggled with US export restrictions and opposing pressure from Beijing.

Jensen Huang Wants China's Big AI Market for Nvidia -- and for America

Kara Greenberg is a senior news editor for Investopedia, where she does work writing, editing, and assigning daily markets and investing news. Prior to joining Investopedia, Kara was a researcher and editor at The Wire. Earlier in her career, she worked in financial compliance and due diligence at Loomis, Sayles & Company, and The Bank of New York Mellon. Nvidia (NVDA) has a China issue. Resolving it, its CEO says, could have bigger implications for America's AI competitiveness. The chipmaker at the heart of the AI boom reported record quarterly sales yesterday, though its results reflected the Trump administration's export curbs, which brought sales of its H20 AI chip in China to a halt. (Investopedia's full Wednesday coverage of the results is here.) Nvidia (NVDA) didn't include sales of the chip to China in its forecast for the current quarter either, despite recently striking a 15% revenue-sharing agreement with the Trump administration to resume sales, a deal the company says is still being ironed out. The government is unlikely to go as far as it did with Intel (INTC), taking a stake in the company, Treasury Secretary Scott Bessent has said. Nvidia has also faced some challenges from the Chinese government, which has asked local firms to avoid using the chip, citing security concerns. The company's results largely received a bullish reception from Wall Street analysts, though several voiced concerns about the uncertainty surrounding its China sales. "Overall the results were good, though with the guide perhaps just a hair light of the latest whispers," Bernstein analysts led by Stacy Rasgon told clients Thursday, with "continued messy China dynamics." China sales of the H20, which had been designed to meet Biden-era export restrictions, were banned earlier this year partly on concerns that giving Chinese firms access to the chip could hurt America's position in the AI race. But the chipmaker's CEO says selling to China could be key to America's technological competitiveness -- not just Nvidia's. "It's fairly important, I think, for the American technology companies to be able to address that market," Jensen Huang said during Wednesday's earnings call. "We just have to keep advocating the sensibility of and the importance of American tech companies to be able to lead and win the AI race and help make the American tech stack the global standard." Huang has been pushing President Donald Trump's administration to allow greater access to the region, with some signs of success. He has argued such curbs weaken America's position by driving prospective Chinese buyers of its chips toward local rivals and shielding them from American competition. But the company also sees big money in China. Huang told investors yesterday he estimates China could represent a $50 billion opportunity for Nvidia this year alone, and that the figure could be set to grow 50% a year -- but only if the company is able to address it. In the short term, that could mean more deals with Trump. Huang said he believes there's a "real possibility," the company could be set to win licenses to sell more advanced chips like its Blackwell, with the president hinting earlier this month he would consider it after further negotiations. CFO Colette Kress, who suggested H20 shipments could be worth between $2 billion to $5 billion in revenue this quarter if geopolitical issues surrounding them are resolved, emphasized "every licensed sale we make will benefit the U.S. economy, the U.S. leadership."

Nvidia's CEO Says America Can't Win at AI Without Selling to China

Kara Greenberg is a senior news editor for Investopedia, where she does work writing, editing, and assigning daily markets and investing news. Prior to joining Investopedia, Kara was a researcher and editor at The Wire. Earlier in her career, she worked in financial compliance and due diligence at Loomis, Sayles & Company, and The Bank of New York Mellon. Nvidia (NVDA) has a China issue. Resolving it, its CEO says, could have bigger implications for America's AI competitiveness. The chipmaker at the heart of the AI boom reported record quarterly sales yesterday, though its results reflected the Trump administration's export curbs, which brought sales of its H20 AI chip in China to a halt. (Investopedia's full Wednesday coverage of the results is here.) Nvidia (NVDA) didn't include sales of the chip to China in its forecast for the current quarter either, despite recently striking a 15% revenue-sharing agreement with the Trump administration to resume sales, a deal the company says is still being ironed out. The government is unlikely to go as far as it did with Intel (INTC), taking a stake in the company, Treasury Secretary Scott Bessent has said. Nvidia has also faced some challenges from the Chinese government, which has asked local firms to avoid using the chip, citing security concerns. The company's results largely received a bullish reception from Wall Street analysts, though several voiced concerns about the uncertainty surrounding its China sales. "Overall the results were good, though with the guide perhaps just a hair light of the latest whispers," Bernstein analysts led by Stacy Rasgon told clients Thursday, with "continued messy China dynamics." China sales of the H20, which had been designed to meet Biden-era export restrictions, were banned earlier this year partly on concerns that giving Chinese firms access to the chip could hurt America's position in the AI race. But the chipmaker's CEO says selling to China could be key to America's technological competitiveness -- not just Nvidia's. "It's fairly important, I think, for the American technology companies to be able to address that market," Jensen Huang said during Wednesday's earnings call. "We just have to keep advocating the sensibility of and the importance of American tech companies to be able to lead and win the AI race and help make the American tech stack the global standard." Huang has been pushing President Donald Trump's administration to allow greater access to the region, with some signs of success. He has argued such curbs weaken America's position by driving prospective Chinese buyers of its chips toward local rivals and shielding them from American competition. But the company also sees big money in China. Huang told investors yesterday he estimates China could represent a $50 billion opportunity for Nvidia this year alone, and that the figure could be set to grow 50% a year -- but only if the company is able to address it. In the short term, that could mean more deals with Trump. Huang said he believes there's a "real possibility," the company could be set to win licenses to sell more advanced chips like its Blackwell, with the president hinting earlier this month he would consider it after further negotiations. CFO Colette Kress, who suggested H20 shipments could be worth between $2 billion to $5 billion in revenue this quarter if geopolitical issues surrounding them are resolved, emphasized "every licensed sale we make will benefit the U.S. economy, the U.S. leadership."

Nvidia Earnings Sustain the AI Stock Rally -- Just Without Nvidia

UBS analysts expect tech giants to sustain strong revenue growth into next year, and see potential for investors to grow even more bullish on their market-leading stocks. Nvidia's earnings were great for AI stocks, just not Nvidia's. "The overall strength of the July quarter results may offer some reassurance for investors after signs of stalling momentum for the large-cap tech rally," wrote UBS analysts of Nvidia's earnings in a note on Thursday. That was evident on Thursday. The S&P 500 hit a fresh record high, with some of the market's favorite AI stocks among the strong performers, including Micron (MU), GE Vernova (GEV), Nvidia competitor Broadcom (AVGO), and nuclear power providers Vistra (VST) and Constellation Energy (CEG). Major cloud providers Amazon (AMZN), Alphabet (GOOG) and Oracle (ORCL) all rose more than 1%. Meanwhile, Nvidia (NVDA) shares fell nearly 1% after the AI chip giant reported earnings that beat estimates. The disconnect between Nvidia and the rest of the AI trade may boil down to expectations, according to Morgan Stanley analyst Joseph Moore. "For the stock to sell off slightly after hours on these types of numbers certainly indicates that sentiment has largely caught up to the growth potential," wrote Moore in a note on Thursday morning. "But outside of China geopolitics, this is a very clean beat and raise quarter," he added. Enthusiasm about artificial intelligence has been the driving force behind much of the stock market's gains over the past three years. Tech giants like Microsoft (MSFT), Amazon and Meta (META) have seen their sales, stocks and spending on AI infrastructure soar amid surging demand for AI products and services. But the rally has repeatedly hit bumps in the road, as it did last week when jitters about an AI bubble cropped up after OpenAI CEO Sam Altman questioned the AI rally's sustainability and an MIT study found the vast majority of companies have seen no material return on their AI investments. Nvidia's report on Wednesday, though, painted a picture of robust and growing AI demand. The company forecast sales would total about $54 billion in the third quarter, a more than $7 billion increase from Q2. That growth rate of about 15% -- robust on a year-over-year basis, let alone quarter-over-quarter -- doesn't include any sales to China, which once accounted for about 20% of Nvidia's data center revenue, according to Moore. Based on management's commentary and Morgan Stanley's market research, Nvidia's growth forecast "represent[s] undershipment of true demand," said Moore. He pointed to strong sales of Nvidia's Hopper architecture, launched in 2022 and superseded by the Blackwell system last year, as evidence of unmet demand. "Compute shortages remain intense enough customers are still buying three year old Hoppers to serve some of that demand," Moore said. There was additional evidence of strong AI demand in cloud data software provider Snowflake's better-than-expected quarterly report on Wednesday. The results were driven by "strength in migrations," according to Citi analysts, suggesting "large enterprises' increasing budget allocation towards database modernization as part of AI projects." UBS analysts pointed to several other reasons, aside from AI hype, to be optimistic about the prospects for technology stocks this year. "Second-quarter earnings for big tech have been robust and broad-based, with most companies beating both sales and EPS estimates," the analysts wrote. They expect tech earnings to grow 15% this year, and hold in the low teens next year. Earnings should be boosted in the near term by U.S. dollar weakness. The U.S. dollar index has fallen about 10% since the start of the year, a decline that, by UBS estimates, should translate to a roughly 2.5% increase in the S&P 500's earnings. "We see more room for the US dollar to decline from current levels, with the Federal Reserve's easing cycle set to kick off next month." High stock valuations have been a recurring source of anxiety for tech investors throughout the AI rally. "Valuations are currently at the upper end of historical ranges," the analysts note, but recent surveys of individual investors and assessments of institutional portfolios suggest there's room for the market to become even more bullish on mega-cap tech stocks.

NVIDIA Still Fails To Sell H20 AI GPUs to China Despite Approval From the Trump Administration, Indicating the Deadlock Is Far From Over

NVIDIA revealed that it has yet to sell the H20 AI chips after the Trump administration lifted the export controls, but this time, the barrier isn't the USG; it's actually China. Team Green reported its Q2 earnings a few hours ago, and apart from all the specifics, one element that was missing was the company's business with China, which has been paused for several quarters now. We did see optimism around H20 being available for Beijing when the Trump administration permitted NVIDIA to sell AI chips to China, but what actually happened was that resentment started to come in from China itself on NVIDIA's AI chips, as the nation claimed presence of security backdoors which we'll discuss ahead. NVIDIA reported in its latest earnings that there were 'no H20 sales' to China-based customers in the second quarter, apart from previous orders placed that were delivered. This is why there's a mention of a 'mysterious' customer who bought $650 million of H20 AI chips, which were "previously reserved" inventory, and it hasn't been included in the Q2 figures. The situation is a deadlock for NVIDIA, since its customers are reluctant to adopt the firm's tech stack, which poses a serious concern about the company's future in China. Beijing's regulatory authority opened an investigation to find security backdoors in the H20 AI chips. This sentiment was mainly driven by President Trump's making it a 'national policy' to integrate security measures under his AI action plan. This prompted China to convince domestic tech giants to avoid buying NVIDIA's AI chips, and instead adopt a 'fully-domestic' tech stack, prepared by the likes of China and Cambricon. However, shifting to it isn't as easy as it might sound, and it isn't something that Chinese firm can do overnight. NVIDIA believes that if H20 AI chip sales are initiated in China, they can at least expect $2 billion to $5 billion worth of revenue from the region, with the inventory in their hands. More importantly, Team Green is hoping to flood China's AI market with a more capable 'Blackwell-based' solution, so it basically becomes unavoidable for domestic firms to adopt NVIDIA's powerful chips, and Jensen is even willing to give a portion of the firm's revenue to the USG for such a deal. Getting access to China is a huge deal for NVIDIA and Jensen right now, and it is one of the most pivotal moves for the company, given that they are missing out on at least 'tens of billions' in revenue. More importantly, domestic firms like Huawei are catching up in the race, which might pose a threat to America's dominance in the AI tech stack.

Nvidia CEO says AI boom far from over after tepid sales forecast

SAN FRANCISCO -- Nvidia CEO Jensen Huang on Wednesday dismissed concern about an end to a spending boom on artificial intelligence chips and said opportunities will expand into a multi-trillion-dollar market over the next five years. Despite Huang's upbeat view on AI demand, shares of the chip designer fell 1.56 per cent to US$178.77 in premarket trading on Thursday as the company's tepid third-quarter sales forecast disappointed investors. The sales outlook excluded potential revenue from China, a move that underscores the uncertainty caused by the Sino-U.S. trade tensions. Huang sought to reassure investors rattled by indications of slowing growth at the chipmaker at the center of the investment frenzy. The founder and CEO's bullish outlook contrasts with recent signs of fatigue in AI-focused stocks and comments from industry leaders about overheated investor enthusiasm. "A new industrial revolution has started. The AI race is on," Huang said. "We see $3 trillion to $4 trillion in AI infrastructure spend by the end of the decade." Pushing up the chipmaker's shares are expectations of demand from Big Tech, data center owners known as hyperscalers and China. "The mega caps are the ones propelling a lot of the capex that Nvidia is benefiting from. But obviously Nvidia still is growing, is able to sell," said Matt Orton, head of advisory solutions at Raymond James Investment Management. "If anything, this just highlights that there's a lot of durability to this (AI) trade... The businesses of these hyperscalers can continue to accelerate, and you're not seeing any sort of sign of a slowdown being reflected in the results of Nvidia." While Nvidia shares have outpaced a roughly 10 per cent gain in the broader market, AI-facing stocks have shown signs of fatigue. OpenAI CEO Sam Altman set off alarm bells this month when he said investors may be "overexcited" about AI. On Wednesday, Huang sounded unperturbed. "The more you buy, the more you grow," Huang said, arguing that Nvidia's technological advances allow customers to process increasing amounts of data while using less energy. "The buzz is: everything sold out." Case in point: A customer outside China bought $650 million worth of Nvidia's H20 reduced-capability chip aimed at the Chinese market in the latest quarter, the chipmaker said. Huang based his forecast in part on the $600 billion he expects for data center capital spending this year from major customers such as Microsoft and Amazon. For a data center costing as much as $60 billion, Nvidia can capture about $35 billion, Huang said. Nvidia and Huang, however, see little reason for AI chip profit growth to slow as second-quarter net income surpassed the fiscal third-quarter profit of Big Tech peer Apple. The company's high-end Blackwell chips are largely spoken for based on 2026 forecasts from its biggest customers. Its earlier-generation Hopper processors are being snapped up too. "When you have something that is new, and it's growing as fast as it is, and with all of the huge capex announcements from the hyperscalers, it's evidence that we're in the early stages" of the AI boom, said Globalt Investments portfolio manager Thomas Martin.

Could China's AI Supply Chain Expansion Spell Trouble for Nvidia? | Investing.com UK

The AI chip wars between the United States and China have reached a critical juncture, with Chinese companies aggressively developing homegrown alternatives to Nvidia's (NASDAQ:NVDA) processors. What began as export controls designed to maintain America's technological edge has inadvertently accelerated China's push toward AI self-sufficiency. As Beijing pours billions into domestic chip development and Chinese companies like Alibaba, Huawei, and Cambricon make significant technological strides, Nvidia finds itself caught in an increasingly complex geopolitical crossfire. The semiconductor giant, despite reporting record quarterly revenue of $46.7 billion, faces the prospect of being gradually squeezed out of what CEO Jensen Huang described as a "$50 billion opportunity" in the world's second-largest computing market. Beijing has launched an unprecedented campaign to build a self-sufficient AI supply chain, backed by massive government investment and nationalist determination. The Chinese government announced an $8.4 billion AI investment fund in January 2025, signaling its commitment to reducing dependence on American technology. This strategic push extends far beyond mere financial backing. Chinese officials have actively discouraged local companies, particularly those affiliated with the government, from purchasing Nvidia chips, citing security concerns. The results are becoming increasingly visible across China's tech landscape. Huawei Technologies has emerged as the flagship of Beijing's AI ambitions, showcasing computing systems that integrate 384 Ascend chips, machines that some analysts claim outperform Nvidia's top-tier systems on specific metrics. Meanwhile, companies like Shanghai-based MetaX have developed chips with larger memory capacity than Nvidia's H20, specifically designed as direct replacements for American processors. Perhaps most significantly, Chinese AI companies are demonstrating that they can achieve impressive results with locally-made chips. DeepSeek, a Chinese startup challenging OpenAI's dominance, recently unveiled V3.1 with features optimized for Chinese-made processors. The company's cryptic social media comments, suggesting that software innovations could be combined with improved Chinese chips to train advanced AI models, sparked a rally in Chinese tech stocks. The breadth of this technological ecosystem is expanding rapidly. Alibaba, China's cloud computing giant, has developed a new, domestically manufactured AI chip, a stark contrast to its earlier processors, which TSMC (NYSE:TSM) made. Beijing-based Cambricon Technologies posted $247 million in quarterly revenue from its Siyuan 590 AI chips, with its stock price rising so dramatically that the company warned investors against excessive exuberance. Nvidia's predicament exemplifies how American tech companies are becoming casualties of the escalating US-China tech war. The company has been barred from selling its most advanced AI processors to China since 2022, forcing it to develop the H20, which is a deliberately weakened version designed to comply with export restrictions. Even this compromise solution faces regulatory uncertainty, as Nvidia warned in its latest filing that it may be "unable to create a competitive product for China's data center market that receives approval from the USG." The financial impact is already visible in Nvidia's numbers. Sales to customers using China as a billing location dropped to $2.8 billion from $3.7 billion a year ago. At the same time, the company didn't ship any H20 processors to Chinese customers last quarter due to geopolitical issues. Revenue from Singapore-based customers, which Nvidia clarified involves products "almost always shipped elsewhere," rose 80% to $10.1 billion, which suggests complex workarounds to navigate trade restrictions. President Trump's unprecedented offer to allow AI chip sales to China in exchange for a 15% revenue cut has created additional complexity rather than clarity. Nvidia CFO Colette Kress noted that while the US government has expressed an "expectation" for this arrangement, no formal regulation has been published. The company warned that "any request for a percentage of the revenue by the USG may subject us to litigation, increase our costs, and harm our competitive position." The regulatory maze extends beyond Washington. Beijing has launched its own pressure campaign, including an antitrust investigation into Nvidia's 2020 Mellanox acquisition and questioning whether compliance with US export controls constitutes discrimination against Chinese customers. This two-front regulatory battle leaves Nvidia navigating contradictory demands from both superpowers while watching potential competitors gain ground in its absence. Despite reporting a 56% jump in quarterly revenue to $46.7 billion and forecasting $54 billion for the next quarter, Nvidia shares dropped 3.1% in extended trading as investors digested the China challenges. The stock, trading at $180.17 with a market cap of $4.39 trillion, reflects both the company's AI dominance and growing uncertainty about its long-term growth trajectory. With a forward P/E ratio of 40 and trading at 26.89 times sales, the valuation assumes continued exponential growth that China's AI independence movement could threaten. The bull case for Nvidia remains compelling in the near term. The company's technological superiority is undeniable, even Chinese competitors acknowledge they're trying to match Nvidia's "fourth-best" H20 processor, not its cutting-edge Blackwell chips. Nvidia's ecosystem advantages, including software tools and platforms that engineers worldwide prefer, create significant switching costs. The potential for renewed H20 sales, which could generate $5 billion in quarterly revenue according to CFO Kress, represents a meaningful upside if geopolitical tensions ease. However, the structural challenges are mounting. Chinese companies are building entire AI ecosystems optimized for domestic chips. The rapid advancement of Chinese open-source AI models, which have impressed international observers and prompted OpenAI to return to open-source development, suggests the technological gap may be narrowing faster than expected. As one analyst noted, Chinese adaptations may allow AI developers to challenge "Nvidia and the American AI stack both at home and abroad" sooner than anticipated. The investment thesis ultimately hinges on whether Nvidia's current AI dominance can withstand the systematic effort by the world's second-largest economy to develop alternatives. While the company's near-term prospects remain strong, the documents suggest investors should carefully consider whether today's premium valuation adequately reflects the long-term risks of an increasingly bifurcated global technology landscape. The next few quarters will be critical in determining whether Nvidia can maintain its growth trajectory as China's AI supply chain matures, or whether this represents the beginning of a more challenging competitive environment for the chip giant. *** Looking to start your trading day ahead of the curve? Get up to speed before the bell with Bull Whisper -- a sharp, daily premarket newsletter packed with key news, market-moving updates, and actionable insights for traders. Start your day with an edge. Subscribe to Bull Whisper using this link.

Nvidia's AI chip sales surge again in latest quarter | BreakingNews.ie

Nvidia's sales of its artificial intelligence chipsets remained a hot commodity during the company's latest quarter, but the demand wasn't quite feverish enough to ease recent worries that the AI craze may be fading. The results announced on Wednesday were hotly anticipated because Nvidia has emerged as a key barometer of a two-year-old AI boom that has been propelling the stock market to new heights. The Silicon Valley chipmaker also became the first publicly traded company to achieve a 4 trillion dollar market value. In recent weeks, though, research reports and comments by prominent tech executives have raised investor fears that the AI mania has been overblown. And now Nvidia's latest numbers covering the May to July period may feed those perceptions because the sales of the company's processors -- indispensable components in the AI data centres being built around the world -- aren't growing as robustly as they once were. The late 2022 release of OpenAI's ChatGPT unleashed a technological phenomenon that is starting to reshape society. The AI chips are part of Nvidia's data centre division, which posted revenue of 41.1 billion dollars (£30.4 billion), a 56% increase from the same time last year, but below the analyst forecast of 41.3 billion dollars (£30.6 billion), according to FactSet Research. Even so, Nvidia's profit of 26.4 billion dollars (£19.5 billion), or 1.08 dollars (£0.8) per share, was higher than analysts predicted, as was its total revenue of 46.7 billion dollars (£34.6 billion) -- also a 56% increase from the last year. Nvidia signalled it believes more good things are still to come by forecasting revenue of 54 billion dollars (£40.1 billion) for the August-October period, slightly above what analysts had been envisioning for the quarter. Nvidia chief executive Jensen Huang told analysts: "We are in the beginning of the buildout." Also during the Wednesday conference call, the company predicted that another three trillion to four trillion dollars (£2.2 trillion to £2.9 trillion) will be spent on AI initiatives by the end of this decade. But Nvidia's stock still slipped 3% in extended trading after the fiscal second quarter report came out, indicating the performance wasn't enough to allay investors' fears. A let-down was almost inevitable, given the stock price has increased by more than 10-fold during the past two and a half years. Investing.com analyst Thomas Monteiro said: "Saying the stock was priced for perfection would be an enormous understatement." Delivering the kind of growth to push Nvidia toward a 5 trillion dollar market value has become more daunting as Nvidia's annual sales have ballooned from 44 billion dollars (£32.6 billion) in its fiscal 2024 to a projected 204 billion dollars (£151.16 billion) in the company's current fiscal year that ends in January. That has translated into progressively slower rates of year-over-year revenue growth. After Nvidia's revenue at least doubled or tripled from the previous year in five consecutive quarters during 2023 and 2024, the growth has been tapering off in the past four quarters. Nvidia would have fared better in the most recent quarter if President Donald Trump hadn't imposed a ban that prevented Nvidia from selling its AI chips in China during the quarter. But investors had already been forewarned the restrictions would cost the company about 8 billion dollars (£5.93 billion) in sales from May through July, so that challenge was already in reflected in Nvidia's stock price. Mr Trump took the China handcuffs off of Nvidia earlier this month in return for a 15% cut of the company's sales in that country -- a compromise that is expected to help boost revenue during the upcoming months, although it's unclear how quickly that will happen. In the best-case scenario, Nvidia may be able to bring in 2-5 billion dollars (£1.48-3.70 billion) in AI chip sales to China, according to Colette Kress, the company's chief financial officer. While the technology industry has been the biggest beneficiary of the AI frenzy, it's also been a boon for the overall stock market. The benchmark S&P 500 has gained 69% since the end of 2022, with AI fervour fuelling much of the investor optimism. But even amid the general euphoria, there have recently been murmurs about whether AI mania will prove to be an echo of the late 1990s dot-com boom and meltdown that plunged Silicon Valley into a funk that lasted several years.

Nvidia: Jensen Huang says AI boom is far from over despite cautious forecasts

Nvidia's announcement was not enough to reassure the markets, which are once again questioning the potential of artificial intelligence. Its CEO, Jensen Huang, is now trying to reinstate his resolutely optimistic vision of the sector. Nvidia CEO Jensen Huang on Wednesday dismissed fears of a slowdown in spending on artificial intelligence chips, saying the market would continue to grow to between $3 trillion and $4 trillion in investment by the end of the decade. Despite this optimism, the semiconductor designer's stock fell nearly 2% on Thursday due to disappointing Q3 revenue forecasts. These projections exclude any potential contribution from China amid ongoing trade tensions. Nvidia has signed an agreement with the Trump administration to obtain export licenses for its H20 chips to Beijing in exchange for 15% of the revenue generated in China. On Thursday Huang said that the group was prepared to apply the same mechanism to the new Blackwell chips if Washington authorized their sale on the Chinese market. Trying to reassure investors who have been shaken by signs of a slowdown, the founder and CEO insisted that the "AI industrial revolution" was only just starting. "The race is on. Everything is sold," he insisted, pointing out that a customer outside China had recently bought $650m worth of H20 chips, even though they were designed with reduced capabilities to circumvent US restrictions. While some observers, such as OpenAI CEO Sam Altman, have deemed the enthusiasm for AI to be exaggerated, Huang remains confident: "The more you buy, the more you grow." He believes that Nvidia's technological advances make it possible to process more data while consuming less energy. In the US, demand from digital giants and data center operators continues to drive growth. Huang anticipates some $600bn in capex this year on data centers, of which Nvidia would capture about $35bn for a site that could cost up to $60bn. The strength of this momentum is already reflected in the results: in Q2, Nvidia's net profit exceeded that generated by Apple in its third fiscal quarter. The high-end Blackwell chips are already almost all reserved until 2026, while the previous generation Hopper processors continue to find buyers. "The massive spending announcements by hyperscalers prove that we are only at the beginning of the cycle," says Thomas Martin, manager at Globalt Investments.