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Nvidia’s business in China will be the focus of investors when the AI chipmaker reports earnings on Wednesday, following an unusual deal with the Trump administration and Beijing’s subsequent efforts to stall imports. Caught in the crossfire of Washington and Beijing’s ongoing trade war, the fate of Nvidia’s China business hangs on where the world’s two largest economies land on tariff talks and chip trade curbs. The artificial intelligence chip pioneer recently agreed to pay the U.S. federal government 15% of the sales it made it China in exchange for export licenses, a move that has drawn bipartisan criticism. Beijingdespite huge appetite for Nvidia’s chips in Chinahas urged domestic companies to limit purchases over apparent security concerns. Reports have emerged that Nvidia has told some suppliers to suspend production of its China-special H20 chips. But Reuters has reported that Nvidia is developing a new and more powerful chip for China. “We’ve got to get clarity on these two governments first, whether China wants the chips and whether the administration is going to allow it,” said Jamie Meyers, senior analyst at Nvidia shareholder Laffer Tengler Investments. “And if so, how is that going to work?” Last year, China accounted for 13% of Nvidia’s revenue. For the second quarter ended July 2025, many analysts did not factor in any revenue from H20 sales in that country given the U.S. approval came late in the quarter, while China’s pushback complicates forecast calculations for the year. In May, Nvidia had said the curbs would shave off $8 billion in sales from the July quarter. The curbs led to a $4.5 billion charge in the previous three-month period. Overall, the company is expected to report that second-quarter revenue jumped 53.2% to $46.02 billion, according to LSEG data, a far cry from the triple-digit growth it witnessed for many quarters. But analysts said the overall AI chip business is booming, with strong demand pouring in from tech giants such as Meta and Microsoft, who have expanded their capital budgets. Still, positive commentary on demand from CEO Jensen Huang could boost AI stocks that have sold off recently on worries that investors may be valuing them too highly. Nvidia shares have gained more than a third so far in 2025, a smaller gain for the period than the previous two years. This still outpaces a more than 15% gain in the broader chip index and the benchmark S&P 500 Index’s near 10% year-to-date rise. For the third quarter, analysts expect Nvidia to guide to revenue of $52.96 billion, up 51% year-on-year. About $6 billion of that could come from China, analysts from Piper Sandler had estimated with further growth at a 12% to 15% rate. But Nvidia could take a 5 to 15 percentage point hit to gross margins on China-bound chips due to the federal deal, with Bernstein analysts estimating it cutting about one point from Nvidia’s overall margins. The company’s adjusted gross margin is expected to drop nearly 4 percentage points to 72.1% in the second quarter. In the October quarter, gross margin is expected to contract by nearly two points to 73.2%. Arsheeya Bajwa, Reuters
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E-Commerce
Its been a big month for design. President Trump just created the National Design Studio and tapped Airbnb cofounder Joe Gebbia to lead the charge, adding to his government work portfolio that includes helping on Elon Musks DOGE. Cracker Barrel has offended or enraged just about everyone with its new logo. Meat is back, in case you didnt know. Figma hit Wall Street with a bang. On this episode of By Design, hosts Liz Stinson and Mark Wilson give the rundown of the latest news and have a conversation with Figma chief product officer Yuhki Yamashita just after the companys IPO. Where does Figma go from here? What does its product lead think about design in the age of AI and vibe coding? Well, youll have to listen to find out. Then, well round things out with the best and worst designs of the month as Teenage Engineering, Apple, A24, and AOL battle for the crown (or not). Listen now on Apple, Spotify, YouTube, or wherever you get podcasts.
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E-Commerce
Shares sank Tuesday in Europe and Asia after President Donald Trump announced he was firing Federal Reserve Governor Lisa Cook.The announcement came after trading closed Monday on Wall Street, where benchmarks reversed some of their big gains from notched last week on hopes for interest rate cuts from the Fed. Trump said in a letter posted Monday on his Truth Social platform that he was removing Cook because of allegations that she committed mortgage fraud.It’s an unprecedented move that marks a sharp escalation in Trump’s battle to exert greater control over what has long been considered an institution independent from day-to-day politics. Apart from rattling financial markets, it is likely to touch off an extensive legal battle that will probably go to the Supreme Court.“Trump’s decision to remove a sitting Fed governor has shaken confidence in the institution that underpins the world’s financial system,” Nigel Green of the financial advisory deVere Group, said in a commentary.“Investors are reacting because the independence of the central bank is critical to market stability, and any sign of political capture raises alarm bells everywhere.”In early European trading, Germany’s DAX lost 0.5% to 24,148.16, while the CAC 40 in Paris slumped 1.6% to 7,716.55. Britain’s FTSE 100 gave up 0.6% to 9,269.40.The futures for the S&P 500 and the Dow Jones Industrial Average were 0.1% lower.In Asian trading, most benchmarks declined.Japan’s benchmark Nikkei 225 dove nearly 1.0% to finish at 42,394.40. Australia’s S&P/ASX 200 declined 0.4% to 8,935.60.South Korea’s Kospi lost 1.0% to 3,179.36 after data showed improved consumer sentiment, strengthening expectations that the central bank won’t lower interest rates.Hong Kong’s Hang Seng shed 1.2% to 25,524.92, while the Shanghai Composite slipped 0.4% to 3,868.38.On Monday, the Wall Street, the S&P 500 fell 0.4%. The Dow industrials closed 0.8% lower and the Nasdaq composite shed 0.2%.Trump has repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting its short-term interest rate, and even threatened to fire him.Wall Street is still overwhelmingly betting that the Fed will cut interest rates at its next meeting in September. Traders see an 84% chance that the central bank will trim its benchmark rate by a quarter of a percentage point, according to data from CME Group.In other trading early Tuesday, benchmark U.S. crude lost $1.09 to $63.71 a barrel. Brent crude, the international standard, declined $1.02 to $67.20 a barrel.The U.S. dollar edged down to 147.62 Japanese yen from 147.77 yen. The euro rose to $1.1637 from $1.1620. Yuri Kageyama is on Threads https://www.threads.com/@yurikageyama Yuri Kageyama, AP Business Writer
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