The company\u2019s role in designing the advanced chips that are used to develop and run AI models such as ChatGPT has propelled it to become the world\u2019s most valuable group by market capitalisation and made it a bellwether<\/a> for the AI boom.<\/p>\n But the company has become embroiled in US President Donald Trump\u2019s trade war with Beijing. <\/p>\n Analysts said Nvidia\u2019s decision not to include China revenue in its outlook disappointed investors after it cut a deal with the Trump administration to resume sales of the H20 chip, which Nvidia designed for the Chinese market<\/p>\n Shares were down about 2.5 per cent in after-hours trading on Wednesday.<\/p>\n Gene Munster, managing partner at Deepwater Asset Management, said excluding China meant Nvidia\u2019s guidance was lower than what some had expected.<\/p>\n \u201cThat $54bn doesn\u2019t include the H20 \u2014 and I was shocked that they didn\u2019t,\u201d he said. Many Wall Street revenue estimates had factored in about $2bn in additional revenue for the current quarter after the export restrictions were lifted, he added.<\/p>\n The state of Nvidia\u2019s China business is a crucial question for investors. <\/p>\n New export controls imposed earlier this year by the Trump administration on H20 chips wiped out its sales. Nvidia earlier this month reached an agreement with the US government to pay a 15 per cent cut in return for a licence to resume sales in China.\u00a0<\/p>\n But Beijing responded by pushing back against Chinese companies using the chip, leaving analysts with little visibility into how much Nvidia will sell this year as wider trade negotiations between Washington and Beijing drag on.<\/p>\n Nvidia chief financial officer Colette Kress told analysts on Wednesday that the company was still waiting on the US government to publish a \u201cregulation\u201d codifying the deal struck earlier this month.<\/p>\n If such geopolitical issues resolve, Nvidia could ship between $2bn and $5bn of its H20 chips to China during the quarter, Kress said, with a \u201cselect number\u201d of Chinese customers already receiving licences in recent weeks.<\/p>\n It said that despite no revenue from China during the quarter due to new US export controls, it had managed to sell $650mn of its China-specific H20 chips to a customer outside of the country.<\/p>\n Data centre revenue, which relates to Nvidia\u2019s AI chip business, was $41.1bn, slightly under consensus estimates of $41.4bn. The slip was offset by better than expected revenue from its gaming segment.<\/p>\n Nvidia\u2019s stock has surged 35 per cent this year as of Wednesday\u2019s close, helping drive gains in the broader market. But it has proved sensitive to any negative news. <\/p>\n The shares took a hit<\/a> last week during a widespread sell-off in companies linked to AI, after a negative report on its practical applications and comments by OpenAI chief executive Sam Altman about investors overhyping the technology.\u00a0<\/p>\n Net income jumped 59 per cent from last year to $26.4bn, against forecasts of $23.5bn. Earnings per share were $1.08, while adjusted gross margin was 72.7 per cent, slightly above consensus estimates of 72.3 per cent.<\/p>\n Recommended<\/p>\n The rollout of the company\u2019s latest Blackwell platform, Blackwell Ultra, was \u201cramping at full speed, and demand is extraordinary\u201d, said Nvidia chief executive Jensen Huang. <\/p>\n The deployment of the new hardware involves more complex infrastructure to build its chips into ever-larger racks of interconnected chips, and hit technical snags early in its development.<\/p>\n Nvidia is working on a new chip based on Blackwell for the China market, that is more powerful than the H20 but still not as capable as its most advanced US chips. Trump has indicated<\/a> that he is open to a similar revenue deal.<\/p>\n![\"Line](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/08\/https:\/\/d6c748xw2pzm8.cloudfront.net\/prod\/19ca3ac0-8388-11f0-8a0e-8da647c3e452-standard.png\")
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