Nvidia’s profits could advance shares of 6% as a boom and tensions in China to weave

Investors are preparing for the last quarterly results of the company due after the closing of the market on Wednesday, with the trade in Nvidia options involving expectations that action will increase by 6%, up or down, a variation of $ 260 billion in Nvidia’s market value.

In the three months which followed the last time that the company gave investors a quarterly update, in May, the shares of Nvidia jumped 35%. But the tension surrounding what is already the most closely watched earning event of the season has been compared to the recent agitation of what some people worry a dangerous financial bubble in the AI ​​actions. And uncertainty about Nvidia’s Chinese activities continues to loom.

Wall Street analysts are looking for NVIDIA’s turnover in T2 to increase by 53% in annual sliding to $ 46 billion, at the end of NVIDIA directives, with a profit per share of $ 1.01. Sales of the data center, the NVIDIA activities node is expected to reach $ 40 billion. But with the actions of Nvidia having won both in recent months, a lack of Wednesday or cautious advice linked to restrictions in China, could send the title.

Nvidia in American-Chinese crosshairs

NVIDIA can remain one of the largest beneficiaries of the generative arrow of the AI, but an essential element of the company’s activities has also become geopolitical football while the United States and China compete for technological domination. In April, Washington began to demand export licenses for the company’s H20 fleas – the destroyed versions of the high -end NVIDA chips which were specially designed to comply with the American export controls which took effect at the end of 2022 and were tightened at 2023. These more strict export licenses were forced to make 4.5 billions of dollars in Q1 TO was invented for an invented and purchasing.

From there, things are not more complicated for the Chinese activities of Nvidia. After the CEO of Nvidia, Jensen Huang, visited President Trump in Mar-A-Lago, the White House said that it would allow the company to sell H20 after all. Nvidia asked for export licenses but has had many delays, thanks to the more severe position of the United States and Chinese buyers hesitating to commit to buying. Then, earlier this month, NVIDIA and AMD concluded an agreement with the Trump administration to grant licenses in exchange for a 15% income sharing agreement on flea sales in China.

But, as H20 flea expeditions have resumed, China has started to discourage businesses from buying them, expressing concerns that NVIDIA asked customers to submit for an examination of the American government could contain sensitive information. The Chinese government would also have claimed that it had found evidence that the Nvidia chip could contain deadlines that would allow us spying agencies to extract data on how they were used. In addition, the comments of the US Secretary of the American Commerce Howard Lutnick about the offer of “fourth best tokens” from NVIDIA were considered “deeply insulting” by Chinese officials, according to the Financial Times.

Finally, last week, Huang announced in Taipei that Nvidia began to reduce the production of the chip H20 and started working on a more powerful successor, saying that the company was working to offer a “new product for AI data centers”, modified to reduce some of its performances, as required by the United States. He said he was looking for the Trump administration approval to sell the chip.

“It is, of course, the American government,” said Huang. “And we are in dialogue with them, but it is too early to find out.”

Following all of uncertainty, analysts predict that Nvidia will not refer to Chinese income in the Gains report.

“I suspect that they will not count, nor provide that Chinese income, there is too much uncertainty,” said Karl Freund, founder and principal analyst at Cabrian-Ai Research.

Jack Gold, founder and principal analyst at J. Gold Associates, said Fortune This Nvidia now has two main groups to please: shareholders and Trump administration. “They are taken between a rock and a hard place,” he said. “This is a really strange situation in which we are now where the government in the United States is actually their hands in their pockets, in the wallets of these companies.”

Bulle problem AI

Beyond geopolitics, Nvidia is confronted with another challenge: the growth of the discomfort that the Boom of AI begins to look like a bubble. This would strike at the heart of Nvidia’s affairs and its stratospheric evaluation – the company is negotiated more than 40 times its expected profits – which are based on the constantly increasing demand for its powerful GPUs. Nvidia’s growth is highly concentrated in a handful of cloud giants, including Meta, Amazon, Google and Microsoft, as well as highly funded AI startups like Openai. If these companies slow down expenses, Nvidia could suddenly lose its greatest buyers.

“I believe that everyone is concerned about a bubble of AI,” said Freund, although he added that these concerns have already lasted three years. He did not think, he stressed that it would appear now. “I think there are still two to five years of growth, he said.

Gold accepted, saying that there were “at least several quarters, if not a few years of good profits” for Nvidia, but he warned at some point, if the market had crashed, this money spent for flea would disappear.

“It concerns me,” he said. “This time, I’m sure the income will always be great – (Nvidia is) selling everything they can build at ridiculously swollen prices, which is good if you can get it out.” But from a broader point of view of the market, he added, the massive constructions of AI data centers “cannot continue forever”.

This is why, said Freund, Huang actually works to attract the attention of investors to go from sight to centered on the data center towards other areas of Nvidia’s company, including its automotive and robotic work: “It is its game at the moment, how to pass investors to a more holistic vision of the AI ​​because it is moving away from the data center and the real world.”

But these investors are probably more interested here and now – than the figures of tomorrow show. Let the Watches start.