Nvidia’s shares fell further in early trading on Thursday after investors reacted to the company’s report of zero H20 chip revenue from China in its Q2 results, despite beating Wall Street’s expectations. The lack of China sales comes amid ongoing US trade restrictions on H20 chip exports to China since April. Nvidia’s stock dropped about 4% on Wednesday and slid another 1.55% to $178.79 per share as disappointment grew.
In July, the US began issuing licenses for approved Chinese buyers, but Nvidia revealed only a few customers in China had received them, resulting in no H20 chip revenue from China in Q2. However, $180 million in H20 chip sales came from other markets. Nvidia developed these chips specifically for China to address US concerns about potential military or AI weapon applications.
Nvidia’s CFO, Colette Kress, said no official regulations have been issued regarding Trump’s proposal for a 15% cut from chip sales to China. Nvidia also excluded H20 chips from its current-quarter forecast but expects shipments worth $2-5 billion once geopolitical issues ease.
Nvidia posted $26.4 billion profit on $46.7 billion revenue in Q2, driven by strong AI chip demand, despite concerns over a potential AI spending bubble. CEO Jensen Huang highlighted the huge interest in AI.
