Nvidia’s stock slid more than 5% in after-hours trading on Thursday after the chipmaker flagged challenges in China, even as it posted strong quarterly earnings.
Shares of the US semiconductor giant closed flat at US$181.60 but dropped to US$172.45 in extended trade. Revenue for the quarter ended July 27 jumped 56% year-on-year to US$46.7 billion, though sales from China, including Hong Kong, fell 24% to US$2.8 billion.
Nvidia sold no H20 chips — processors tailored for China under US export rules — during the quarter. The chip brought in US$4.6 billion in the prior quarter. The company cited US regulatory demands for a 15% revenue cut and fresh scrutiny from Beijing, which raised concerns about “built-in vulnerabilities.” Nvidia denied any back doors in its GPUs.
Despite the setbacks, CEO Jensen Huang said China remains a US$50 billion opportunity, calling it the world’s second-largest computing market with “excellent” open-source AI models such as DeepSeek, Alibaba’s Qwen, and Moonshot AI’s Kimi.
Still, analysts warn US-China tech tensions pose risks. Saxo noted export curbs could favor local chipmakers, a view reinforced as China’s Semiconductor Index hit a record high this week. Rising players include Cambricon Technologies, dubbed “China’s little Nvidia,” which reported a 4,348% surge in first-half revenue, and SMIC, the country’s top foundry.
China is also pushing to expand domestic chip capacity, with state guidelines encouraging AI chip development and reports suggesting the country aims to triple AI processor output next year.
Even so, some analysts remain bullish. Wedbush Securities called any Nvidia stock pullback a “buying opportunity,” forecasting the company’s valuation — already at US$4.4 trillion, the world’s largest — could reach US$5 trillion by early 2026.
