Nvidia Faces Mixed Investor Response Amid China Tensions

• Nvidia’s latest earnings report excludes China chip sales, prompting debate over growth durability and geopolitical risks.

Guidance Excludes China, Raising Market Questions

Nvidia’s recent quarterly update has sparked divided reactions among investors after the company excluded sales of its H20 chips to China from its forward guidance. The decision comes amid ongoing trade tensions between the U.S. and China, leaving analysts to reassess the company’s growth trajectory. Shares fell approximately 2% following the announcement, despite CEO Jensen Huang’s reassurances about continued demand for AI infrastructure. Some observers noted that data center revenue growth was modest, prompting speculation about potential softness in cloud provider spending.

The absence of China revenue, despite Nvidia’s prior negotiations with the Trump administration, led to scrutiny over the company’s future prospects in one of the world’s largest semiconductor markets. Wall Street analysts are now parsing the details for signs of momentum beyond geopolitical constraints. While Nvidia’s overall results remained strong, the exclusion of China sales has introduced uncertainty into long-term forecasts. Several experts believe the company may eventually resume shipments, albeit in a modified form.

Analyst Views Reflect Cautious Optimism

Industry voices offered a range of perspectives on Nvidia’s performance and outlook. Tim Tully of Menlo Ventures emphasized the company’s continued dominance in the AI hardware space, citing its next-generation Blackwell chips as a potential growth driver. Ben Barringer from Quilter Cheviot described the results as solid but not exceptional, suggesting that broader enterprise and sovereign adoption could eventually validate long-term projections. John Belton of Gabelli Funds pointed to China as the quarter’s main shortfall, though he remained confident in Nvidia’s broader trajectory.

Morgan Stanley analysts noted that China remains difficult to forecast, and they have excluded it from their models pending resolution of geopolitical issues. Paul Meeks of Freedom Capital Markets expressed satisfaction with the $54 billion revenue forecast, even without China, and speculated that a simplified chip version might be permitted under future trade agreements. Jay Goldberg from Seaport Research Partners observed that Blackwell’s ramp-up was slower than expected, and warned that prolonged delays could strengthen domestic Chinese alternatives. Gil Luria of D.A. Davidson attributed the guidance miss entirely to the China exclusion, highlighting the uncertainty around future sales.

Long-Term Growth Debated Amid Political Headwinds

While Nvidia’s top-line performance met expectations, concerns linger about the sustainability of its growth in a politically charged environment. Bob O’Donnell of Technalysis Research noted that the slight miss in data center revenue could signal a pause in AI infrastructure expansion. Nonetheless, the company’s share buyback and strong forecast suggest confidence in near-term operations. Richard Clode of Janus Henderson Investors reflected on the scale of Nvidia’s ambitions, acknowledging that reaching multi-trillion-dollar valuations will require consistent momentum.

Dan Coatsworth of AJ Bell pointed out that political dynamics, rather than demand, are the primary obstacle to Nvidia’s global expansion. The exclusion of H20 chip sales to China surprised investors and contributed to the stock’s decline. As the debate over growth durability continues, Nvidia’s ability to navigate trade restrictions and maintain leadership in AI hardware will be closely watched. Barringer reiterated that while the numbers are reassuring, they fall short of fully validating the company’s long-term projections.