China Investment Compass - Quarterly 3Q25: stay defensive and focus on bottom- up earnings Equity Strategy Stay defensive and focus on earnings China market outperformed in 1Q25 but traded sideways in 2Q. The Liberation Day tariffs drove a broad-based market sell-off in early April, but major global markets rebounded subsequently and largely recovered the losses. Investors we spoke to recently are less concerned about the geopolitical tensions (believing "the worst is over") and have low expectations on any ...

Key Takeaways NVDA expects a $8B Q2 revenue loss due to U.S. export bans on its China-focused H20 AI chips. A $4.5B write-down highlights NVDA's heavy reliance on China for AI chip sales. NVDA targets growth in Saudi Arabia, Taiwan and the EU, but China remains irreplaceable.NVIDIA Corporation (NVDA) is expected to lose around $8 billion in revenues in the second quarter of fiscal 2026 due to new U.S. government export rules. These rules block shipments of its H20 AI chips to China. This will have a big i ...

ToplineArtificial intelligence titan Nvidia took center stage Wednesday afternoon when the company shared financial results from its quarter ending last month, and though it was another stretch of record-setting sales amid the AI boom, Nvidia reported unusually weak bottom line growth as Washington regulations on the company’s China dealings took hold.Nvidia CEO Jensen Huang, the world's 11th-richest person, has come a long way from bussing tables.AFP via Getty ImagesKey FactsShares of Nvidia jumped 3% to $ ...

Core Viewpoint - Nvidia is expected to report record sales driven by the AI boom, but the bottom line may be weaker due to regulatory impacts on its China operations [1][4]. Financial Results - Nvidia will announce earnings for the quarter ending April 27, with expected revenue of $43.3 billion, reflecting a year-over-year growth of 66% [2]. - The anticipated diluted earnings per share (EPS) is $0.73, with a net income of $18.2 billion, indicating a 20% annual increase, which is significantly lower than the over 70% growth seen in the previous seven quarters [3]. Market Impact - Nvidia's stock saw a slight decline of 0.4% to $135 per share ahead of the earnings report, with analysts suggesting a need for a positive earnings surprise to boost market performance [4]. - The broader equity market is recovering, with the S&P 500 up 6% in May, marking its best monthly gain since 2023 [4]. Gross Margin Expectations - Analysts from Bank of America expect Nvidia's gross margin to be 58%, the lowest since 2022, but forecast a recovery to nearly 75% by the end of the year [5]. Industry Position - Nvidia holds a dominant position in the semiconductor market for generative AI applications, with a 75% share in the AI accelerator market, making it one of the world's most valuable companies with a market capitalization of $3.3 trillion [6][7]. - Since the launch of ChatGPT in November 2022, Nvidia's stock has surged by 700%, significantly outperforming the S&P benchmark [7]. Company Background - Nvidia was founded in 1993, and its CEO Jensen Huang has become the 11th richest person globally, with a fortune of $119 billion [8][9].

With shares down nearly 20% year to date, Nvidia (NVDA -0.24%) had a rough start to 2025. The massive artificial intelligence (AI) chipmaker has proven vulnerable to trade and geopolitical uncertainty during the opening months of the Trump administration, which could seriously undermine its business in China.Let's dig deeper to determine whether investors should view this dip as a buying opportunity or a signal to stay away from Nvidia stock.A catch-22 situation in China?Nvidia's China trouble came to a hea ...