History is full of lessons, even for the first $4 trillion company and one that accounts for some 8% of the S&P 500 index. If the past is anything to go by, Nvidia’s trouble in China could become a big worry.
To be sure, the main takeaway from Nvidia’s earnings Wednesday night is they weren’t that bad. Yes, artificial intelligence data center revenues were disappointing
and the outlook shows decelerating growth. But after years of breakneck expansion, investors must feel like Alexander the Great, weeping because there are no worlds left to conquer.
Well, except one. China, as Nvidia CEO Jensen Huang pointed out, is the second-largest computing market. And last quarter Nvidia made zero new sales there. For this quarter, Huang is also penciling in another goose egg for new orders.
He’s got a positive spin on this: if restrictions put in place by President Donald Trump are eased, China doesn’t continue to discourage its companies from buying Nvidia chips, and broader U.S.-China trade negotiations bear fruit then any sales in China would be a bonus of as much as $5 billion on top of current guidance. Investors clearly see a good chance that will happen, otherwise the stock would have dropped even further than the 3.7% in Wednesday after-hours trading.
But what if
Nvidia is being realistic, rather than just conservative? China trade talks are taking longer than most, with key deadlines already extended twice. The White House is very clear that it sees China as an adversary. Commerce Secretary Howard Lutnick’s quip that he wants the world’s second-largest economy to be addicted to the fourth-best U.S.-made chips gives China all the more reason to invest in homegrown hardware.
History suggests that, on balance, globalization is enriching and deglobalization is impoverishing. If commerce with China is about to go in reverse and we’re heading for a repeat of what happened with the low-trade Cold War with the Soviet Union, that’s bad for the whole economy, not just Nvidia.
—Brian Swint
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Nvidia’s Revenue Jumps. It’s Still Navigating China.
Start-ups and corporations are still clamoring for Nvidia’s AI data center chips, but second-quarter revenue from the data center business was slightly below elevated expectations. Demand for its accelerated platform used for
large language models, recommendation engines, and generative and agentic AI drove strong growth.
- The chip maker reported data center revenue of $41.1 billion in the July quarter, up 56% from a year ago. Large cloud computing providers made up about half that revenue. The quarter didn’t have any H20 chip sales to China and
it hasn’t assumed any in its outlook.
- It’s still working out issues with China. If the geopolitical issues subside Nvidia can ship $2 billion to $5 billion of H20 revenue in the current quarter. CEO Jensen Huang also said sales of a newer Blackwell chip for China is a “real possibility” in the future.
- Second-quarter revenue of $46.7 billion surged 56% from a year ago, and profit was $1.05 a share. Specifically, Blackwell data center revenue rose 17%. Nvidia sees third-quarter revenue around $54 billion, higher than Wall Street forecasts.
- Operating expenses are expected
to rise in the high-30% range for the 2026 fiscal year. The chip maker is boosting its stock buyback by $60 billion. As of the end of the second quarter it had $14.7 billion remaining under its prior authorization.
What’s Next: Nvidia said its new AI server products are ramping well. CFO Colette Kress said the transition to its most advanced and latest Blackwell Ultra GB300 NVL72 AI server has been “seamless” and full production is under way.
—Tae Kim
Trump’s Fed Pick Defends Tariffs, Blames Biden for Intel Stake
President Donald Trump picked economic advisor Stephen Miran to take a temporary open seat on the Federal Reserve’s board of governors. Trump is also considering Miran for the longer-term seat held by Fed Gov. Lisa Cook, whom Trump said Monday he is firing. She is contesting the decision. Harvard-trained economist Miran spoke with Barron’s this week, sharing his thoughts on tariffs and the government’s stake in Intel.
- “We’ll see,” Miran said when asked about the government taking equity stakes in more companies, as it did with Intel. “Providing upside exposure in the form of equity is proper stewardship of government resources for the taxpayer,” he added.
- The economist blamed the need for equity stakes on the previous administration. “This money was already out the door,” he told Barron’s.
- Miran also said there was no evidence the White House’s sweeping tariffs have driven up inflation. “People will try and blame things on other people no matter what,” he said in response to a question about auto maker Ford, which said it had $800 million in tariff-related costs in the first half of 2025. Ford declined to comment.
- One point of controversy Miran was happy to clear up: His surname is pronounced My-run, not Mur-an. “I never really correct people because, like, 100 years ago, there were six more syllables and they got chopped off when my grandparents came to the United
States.”
What’s Next: Miran wouldn’t take questions about the Fed, given his pending nomination. The Trump administration wants the Senate to vote on his candidacy before the central bank’s next monetary policy committee meeting on Sept. 16-17.
—Matt Peterson
Nuclear Plants Refire to Boost Power Production for AI Boom
Backers of nuclear energy envision dozens of shiny new nuclear reactors being built all over America. For now, old nuclear reactors are being refurbished and brought back online to add more electricity to the grid as soon as possible, feeding the energy-hungry artificial intelligence boom.
- Florida-based renewable energy giant NextEra Energy is reviving the reactor at Iowa’s Duane Arnold energy center near Cedar Rapids. It will be the third
potential restart of a mothballed nuclear facility to be announced since the start of 2024, but it won’t be running until 2028.
- NextEra sees the Duane Arnold plant as a potential earnings driver when its other businesses are facing challenges. It’s one of the biggest in renewable energy generation but federal subsidies for wind and solar power are ending amid the Trump administration’s support for fossil fuel and nuclear energy.
- Nuclear start-ups are focused on new plants. Oklo has three projects under an Energy Department pilot program that aims to have at least three test reactors running by July 2026. Oklo’s small modular reactors are designed to run on nuclear waste and require refueling once every decade.
- Oklo
