(Reuters) -Nvidia investors accustomed to blowout forecasts were left divided after the AI chip giant excluded some China sales from its current-quarter guidance in the face of a trade war between Washington and Beijing.
The company’s shares fell about 2% in premarket trading on Thursday, even as CEO Jensen Huang dismissed concerns about the AI spending boom sputtering. Some analysts also pondered whether Nvidia’s key data-center results hinted at demand weakness from cloud providers.
The absence of sales of its H20 chips to China – one of the biggest semiconductor markets in the world – despite the company striking an unprecedented deal with the Trump administration, left Wall Street parsing the fine print for clues on future momentum.
Here are some key quotes:
PAUL MEEKS, MANAGING DIRECTOR, FREEDOM CAPITAL MARKETS:
“I’m pleased with Nvidia’s quarterly results and guidance, particularly the $54 billion revenue forecast for next quarter, which excludes H20 shipments to China.”
“The stock likely ran too far too fast into the print….. I expect Nvidia will be allowed to ship a ‘dumbed down’ version of its latest chips as part of Trump’s likely tariff and trade deal with China. I’d buy these shares if and when they settle.”
JAY GOLDBERG, SENIOR ANALYST, SEAPORT RESEARCH PARTNERS:
“Blackwell (chip’s) ramp was strong, but not as strong as investors had hoped. Data Center revenue grew low single digits sequentially — the lowest quarter-on-quarter growth rate in a long time.”
“These results are good for a normal company in normal times, but Nvidia is neither. The lack of China revenue and uncertainty around future shipments is a concern. The longer this takes, the more entrenched domestic PRC alternatives become.”
GIL LURIA, ANALYST, D.A. DAVIDSON:
“Nvidia’s disappointing guidance appears to be entirely due to excluding potential China sales, which were included in some estimates. It’s unclear when restrictions will lift and sales can resume.”
BOB O’DONNELL, PRESIDENT AND CHIEF ANALYST, TECHNALYSIS RESEARCH:
“Nvidia’s top-line beat isn’t a surprise, but the slight miss on data center revenue may point to a slowdown in AI infrastructure build-out. Still, the strong forecast and share buyback show confidence in near-term business.”
RICHARD CLODE, PORTFOLIO MANAGER AT JANUS HENDERSON INVESTORS:
“We’ve got to such big numbers now, even if you think about $3 trillion to $4 trillion through the end of the decade, you’re basically ending up at a trillion annualized running rate. At this cadence, we’re going to get there fairly quickly.”
“So there is still this debate on durability of growth, the cyclicality of Nvidia. It’s not going to be one way to the right as we think about to the end of the decade.”
DAN COATSWORTH, INVESTMENT ANALYST AT AJ BELL:
“AI demand is not the problem for Nvidia, it’s more how politics has got in the way of its grand ambitions for global domination.”
“The chip giant has not included any H20 sales to China in its forward earnings guidance, leaving investors shocked and the share price down in premarket trading. Also contributing to share price weakness was investor disappointment around data center figures.”
BEN BARRINGER, GLOBAL TMT ANALYST AT QUILTER CHEVIOT:
“It’s a solid set of numbers, it’s not a massive beat. So it provides a little bit of reassurance, but it’s not a complete underwriting of the growth.”
“If we start to see big contributions from sovereign and from enterprise, then maybe that $4 trillion starts to become more realistic or more into the model. But at the moment, I think it’s quite a long-term forecast that I don’t put huge weight on at the moment, to be proven.”
(Reporting by Rashika Singh, Arsheeya Bajwa and Akash Sriram in Bengaluru; Editing by Devika Syamnath)
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