With all the hype this week over Nvidia’s earnings, their reported results were pretty good. But Wall Street hates pretty good and is saying that Nvidia (NVDA) missed their mark.
Huh?
Here’s where it pays to know how to “Read Between the Lies.”
Read: Read Between the Lies (HERE)
Last month, Nvidia got a quid pro quo deal with the Administration to sell China-specific AI accelerators, if the US gets 15% of the sales.
And Trump, quite skillfully, dropped a hint that NVDA CEO, Jensen Huang, and Nvidia are pushing for a new China-specific chip based on Blackwell AI platform architecture.
Cue Up: H2O chips.
Although NVDA dominates the market for AI chips, one area to keep an eye on is any update around its H20 chips, which is a hot-button issue for investors.
And even though NVDA is one of the world’s largest companies (and accounts for 8% of the S&P) NVDA said that there were no H20 sales to China-based customers in the second quarter, and the question whether there will be any sales in the future will likely be discussed on the call.
Behind What Nvidia Missed
What is not being reported is how Nvidia has been dealing with the fallout from a growing US-China rivalry, where semiconductor technology has become a major flashpoint.
In April, the Trump administration tightened restrictions on exports of data center processors to Chinese customers, effectively shutting Nvidia out of the market.
They have since backed off.
But that could change in a heartbeat.
Ironically (or NOT) Beijing has encouraged a move away from using US technology in AI systems accessed by the Chinese government.
And the shifting policies have made it difficult for Wall Street to predict how much revenue Nvidia might be able to recover in the market.
Besides, who’s to say that one day a Chinese company will release a better GPU than Nvidia?
And that’s when the panic starts.
Question:
Who out there is old enough to remember when AOL and Cisco had triggering events that led to the Dot Com collapse?
(25 years later, AOL announced it is ending dial up Internet access in September…LMAO!)
We now wait to see if the reaction to NVDA will trigger another Sadie Berger moment.
READ: A Sadie Berger Moment in 2025? (Here)
Is the Tech Wreck 2 coming to a theater near you soon?
Find out in our September issue of “Simplifying Wall Street…In Plain English” (HERE).
Share this with a friend…especially if they own NVDA, They’ll thank YOU later.
And tell them:
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