Key Takeaways NVIDIA's Data Center revenues surged 73.3% year over year to $39.1 billion in Q1 fiscal 2026.Strong adoption of Blackwell and demand from hyperscalers like Microsoft, Google and Amazon drove growth.U.S. export approval for H20 chips to China and new AI chip plans further support Data Center momentum.NVIDIA Corporation’s (NVDA) Data Center business has become its primary growth engine, driven by increasing demand for artificial intelligence (AI) infrastructure. In the first quarter of fiscal 20 ...

Core Viewpoint - Nvidia is expected to report strong earnings for Q2 fiscal 2026, driven by significant demand for its GPUs and increased capital expenditures from major tech companies [1][2][12]. Group 1: Earnings Expectations - Nvidia holds a dominant 92% market share in the GPU market, which is crucial for data centers and AI applications [4]. - Analysts predict Nvidia's Q2 revenue to be $45.75 billion, a 52% increase from $30.04 billion a year ago, with earnings per share (EPS) expected to rise to $1.00 from $0.68, reflecting a 47% improvement [6]. - Major customers like Meta Platforms, Alphabet, and Microsoft are increasing their data center spending, which bodes well for Nvidia's revenue growth [5]. Group 2: Market Reactions and Historical Performance - Nvidia's stock has historically jumped following positive earnings reports, with a consistent addition of approximately $5 billion in revenue each quarter [10][11]. - The company has experienced solid post-market performance, with stock drops primarily linked to external factors like tariffs rather than demand for its products [11]. - Nvidia's market capitalization currently stands at $4.4 trillion, indicating strong investor confidence [11]. Group 3: Strategic Developments - Nvidia is expected to provide updates on a deal with the White House that allows it to sell H20 AI chips in China, which could significantly impact future earnings [7][8]. - The company previously incurred a $4.5 billion charge due to restrictions on selling these high-performance chips, making the new deal crucial for its financial outlook [7].

US-China Chip Trade Dynamics - Nvidia and AMD reportedly plan to give the US government a 15% revenue share from specific chips sold in China for market access [1][4] - China questions the safety and trustworthiness of Nvidia's H20 AI chip, with state media suggesting it may pose a national security risk [2][3][9] - The US government previously restricted H20 exports to China on national security grounds, a stance later reversed by the Trump administration [4] Export Control and Negotiation - China is reportedly seeking relaxation of export controls on advanced high bandwidth memory (HBM) chips as part of tariff pause extension discussions [5][11] - The discussion includes the potential impact on Huawei's ability to develop its own AI chips if China gains access to more advanced HBM chips [11][12] Company Statements and Market Impact - Nvidia denies having backdoors in its chips that could allow remote access or control [5] - Nvidia acknowledges following US government rules for worldwide market participation but does not directly address the 15% revenue cut [6] - Chinese companies like Huawei and SMIC may benefit if local customers question Nvidia's H20, potentially leading to increased domestic chip development and sourcing [13]

Group 1 - The U.S. Secretary of Commerce has allowed chipmakers like Nvidia to sell certain AI chips in China again, but licensing delays persist [1] - Nvidia has not yet received a license to sell its H20 AI chips due to a backlog in the U.S. Department of Commerce [1][2] - National security experts are advocating for restrictions on Nvidia's sales of H20 AI chips to China, citing national security concerns [2] Group 2 - The U.S. Department of Commerce is experiencing a backlog of licensing applications due to staff losses and communication breakdowns with the industry [2]

Core Insights - Jensen Huang, CEO of NVIDIA, received a warm reception in Beijing during his third visit this year, highlighting his celebrity status in China [1] - Huang praised Chinese AI models from companies like DeepSeek, Alibaba, and Tencent as "world class" and acknowledged the sophistication of the Chinese supply chain [2] - NVIDIA resumed sales of its advanced H20 AI chips to China after a temporary U.S. ban was lifted, with the H20 chip designed to comply with U.S. export regulations [3] Group 1 - Huang's visit included attendance at the China International Supply Chain Expo, where he recognized the capabilities of NVIDIA's competitor, Huawei [2][3] - Huang held meetings with high-ranking Chinese officials, including Vice Premier He Lifeng and Commerce Minister Wang Wentao, reinforcing NVIDIA's commitment to the Chinese market amid U.S.-China trade tensions [4] - Prior to his trip, Huang communicated with U.S. officials, including President Trump, who wished him a good trip [4]

The head of the US House Select Committee on China faulted the Trump administration’s decision to allow Nvidia to resume shipments of its H20 AI chips to China https://t.co/8mzp7nMLiR ...

Core Insights - TSMC reported a 60.7% increase in net profit for Q2, reaching NT$398.3 billion (US$13.5 billion), surpassing analyst expectations [2][3] - The company's revenue for the second quarter rose by 39% year-on-year, also exceeding forecasts [2][3] - TSMC's chairman indicated that demand for chips, particularly for generative AI, is expected to remain robust, leading to an upgraded revenue forecast for the year [3] Financial Performance - TSMC's net profit for the three months ending in June was NT$398.3 billion (US$13.5 billion), a 60.7% increase from the previous year [2] - The second-quarter revenue increased by 39% compared to the same period last year, outperforming expectations [2] Market Dynamics - The demand for chips is driven by the growth of generative AI, which has significantly impacted the global economy [3] - TSMC's positive outlook is supported by Nvidia's decision to resume sales of H20 AI chips to China, following the easing of licensing restrictions by the U.S. [3][4] Strategic Positioning - TSMC is the largest contract chipmaker globally, with major clients including Nvidia and Apple [5] - The company is navigating potential challenges from U.S. tariffs but remains optimistic about its business performance [6]

Core Viewpoint - NVIDIA Corp. is optimistic about resuming sales of H20 AI chips to China, which could significantly impact its revenue and stock price [1][8]. Sales and Revenue Impact - NVIDIA lost $2.5 billion in revenues in China in Q1 fiscal 2026 and anticipates an $8 billion revenue loss from China in Q2 fiscal 2026 [3]. - The resumption of sales in China could potentially bring back $10 to $20 billion in revenues for the remainder of fiscal 2026, translating to an EPS increase of 25 to 50 cents [4][21]. Stock Performance - NVIDIA's stock price increased by 4% following the announcement regarding H20 chip sales to China [1][8]. - The stock has surged nearly 97% since its recent low in early April, with a year-over-year gain of over 26% [5]. Innovation and Product Development - NVIDIA is committed to innovation, with plans to unveil Blackwell Ultra in the second half of 2025 and begin shipping Vera Rubin in 2026 [9]. - The company is shifting focus towards reasoning AI models, which require significantly more compute power, presenting new growth opportunities [11][12]. Automotive Sector Growth - NVIDIA's automotive revenue jumped 72% year-over-year to $567 million in Q1 fiscal 2026, with expectations to exceed $5 billion in fiscal 2026 [14]. - The company is actively involved in providing AI solutions for advanced driver-assistance systems and autonomous vehicles, partnering with major automotive brands [15][16]. Financial Metrics - NVIDIA has an expected revenue growth rate of 51.4% and an earnings growth rate of 41.8% for the current year [17]. - The company boasts a return on equity (ROE) of 105.1%, significantly higher than the S&P 500's ROE of 17% [19].

Market Dynamics - Nvidia CEO Jensen Huang expects to receive US licenses soon to export H20 AI chips to China [1] - This would formally allow Nvidia to resume sales of a highly sought-after component in the global semiconductor market [1]

Core Viewpoint - CoreWeave is investing $6 billion to open a new data center in Pennsylvania, indicating its commitment to the rapidly growing AI infrastructure market [1][5]. Investment and Growth - The investment in the new data center is part of CoreWeave's strategy to expand its capacity to meet increasing demand in the AI sector [2][4]. - The company has reported a remarkable 420% revenue growth in the last quarter, showcasing its rapid expansion [7]. Data Center Details - The new facility in Lancaster, Pennsylvania, will have an initial capacity of 100 megawatts, with the potential to expand to 300 megawatts [5]. - With the addition of the Lancaster facility, CoreWeave will operate a total of 33 AI data centers, including 28 located in the U.S. [6]. Market Context - The announcement coincides with Nvidia's ability to sell its H20 AI chips in China, which could benefit CoreWeave as a key ally and investor [2]. - The stock price of CoreWeave increased by 6.2% following the announcement of the new data center [2].