Nvidia Forecast Hinges on China Meeting Outcome

Nvidia's (NVDA) forecast for Q3 revenue is $108 billion, but it assumes no data center chip sales from China. This may change on Thursday, when President Donald Trump hosts Chinese President Xi Jinping at the White House, with AI among the main topics.

The company has been restricted from exporting certain chips to China since April 2025, and Nvidia has taken a $4.5 billion charge for lost revenue. The US government issued licenses allowing small quantities of H200 chips to be sent to China in February, but sales remained tiny due to Beijing's limitations on purchases.

Nvidia says it cannot deliver a competitive data center product for broad distribution in China under current rules, and Washington's permission alone does not reopen the market. If something changes at the summit, even a return to last quarter's H20 sales would be modest, with $7 billion or roughly 7% on top of the current forecast.

Management is right not to promise otherwise, as Chinese competitors have filled the gap and buyers may not rush back to Nvidia. The stock trades at about 14 times fiscal 2028 earnings estimates, which may already price in some optimism for a breakthrough on Thursday.