Nvidia's China Chip Sales Forecast: A Potential Game-Changer at the U.S.-China Summit
Nvidia's forecast for its fiscal third-quarter revenue assumes no sales of data center chips to China, a market that accounts for over 90% of the company's business. The current forecast of $108 billion in revenue would be a significant increase from the prior year's $57 billion.
This assumption is due to the ongoing restrictions on chip exports to China, which have limited Nvidia's ability to sell its high-end H200 chips in the country. Despite some recent shipments of small quantities of H200 chips to Chinese customers, these sales remain tiny compared to the overall data center business.
The U.S.-China summit scheduled for September 24 may bring changes to the current export rules and potentially open up new opportunities for Nvidia's chip sales in China. However, analysts believe that even a return to last year's H20 sales levels would only add about $7 billion to the company's revenue, which is roughly 7% of the current forecast.
Nvidia's stock price has been affected by these export restrictions and the overall uncertainty surrounding the company's China business. The stock currently trades at around $222, with a price-to-earnings ratio of about 14 times fiscal 2028 earnings estimates.