Nvidia (NVDA) just delivered another monster quarter, but the real story wasn’t the revenue line. It was the silence from China. CEO Jensen Huang admitted the company booked zero new sales there last quarter, and he’s not counting on any for this one either. For a company that just became the first $4 trillion giant, that’s pretty worrying.
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The warning goes far beyond just Nvidia. China is the world’s second-largest computing market. Shutting the door on that business doesn’t just dent one company’s growth, it chips away at the story investors have told themselves for decades. And that story is that global tech demand would always expand and U.S. firms would always dominate.
Nvidia’s Numbers Look Fine, But the Politics Don’t
On paper, Nvidia is still crushing it. Second-quarter revenue jumped 56% year-over-year to $46.7 billion, with AI data center sales hitting $41.1 billion. Profit came in at $1.05 per share, and management raised third-quarter revenue guidance to around $54 billion, well above Wall Street’s targets.
But the China piece stands out. None of that $41 billion came from its H20 chip line in China, and Huang openly said the outlook assumes another round of goose eggs. If trade restrictions ease, sales could add $2 to $5 billion in upside. Yet that’s hardly a base case when U.S.-China talks keep dragging and Washington openly frames Beijing as a strategic rival.
How This Could Spill into Everything Else
The risk isn’t just whether Nvidia books a few billion more or less. It’s whether deglobalization becomes the new normal. Commerce Secretary Howard Lutnick quipped that he’d prefer China be “addicted to the fourth-best U.S.-made chips.” This kind of rhetoric only accelerates Beijing’s push to build its own semiconductor supply chain.
If Nvidia can’t sell its most advanced hardware in China, it loses a growth engine. But the bigger hit lands on markets and the global economy. History shows globalization enriches. Decoupling does the opposite. A repeat of Cold War-style separation, this time with the world’s second-largest economy, isn’t just bad for Nvidia. It’s bad for everyone betting on steady earnings, steady trade, and a steady stock market.
Is Nvidia a Buy, Hold, or Sell?
Wall Street analysts still see room for Nvidia despite the China drag. Nvidia has been rated a Strong Buy. Out of 39 ratings in the past three months, 35 are Buys, only three are Holds, and just one is a Sell. The average 12-month NVDA price target sits at $205, implying nearly 13% upside.
