Nvidia Ships First H200 Chips to China, but Forecasts No Data-Centre Revenue from the Country

Nvidia has confirmed the first shipments of its H200 data-centre processors to China under a new US licensing scheme, ending a months-long lockout. However, the sales accounted for less than 1 per cent of the company's US$89 billion data-centre revenue in its second quarter, which ended on July 26.

The US chip giant's US$108 billion third-quarter revenue forecast continued to assume no data-centre computing revenue from China. Despite the muted contribution from China, Nvidia struck an upbeat tone on global demand. The company said it expected revenue to grow by about 70 per cent in its 2028 financial year, describing the forecast as supply constrained.

CEO Jensen Huang said actual demand was "much greater than 70 per cent", adding that Nvidia's available supply allowed it to confidently forecast growth at that level. "The unconstrained [growth] would be a lot higher," Huang said in an earnings call webcast on Wednesday, adding that the company had secured significant capacity but still needed "a lot more". He said hyperscalers represented only about half of the opportunity, with the remainder coming from enterprises, neo clouds and sovereign AI projects.

Strong Earnings and Stock Rally

Nvidia posted a second-quarter earnings report that jolted investors, with revenue of $96.2 billion, above analysts' $92.2 billion consensus estimate. The stock jumped more than 4% in after-hours trading. The company projected 70% revenue growth for the next fiscal year, a figure significantly higher than analysts' 44% estimate.

During the quarterly earnings call, Huang responded to a request from an analyst at Goldman Sachs to rank the most acute constraints on Nvidia's ability to meet customer demand. The analyst asked Huang to rank items like data center power, shell availability, memory pricing, and wafer foundry access that might be limiting growth.

"There's something funny I could say, but I'm going to just not," quipped Huang. "I think the answer is our entire supply chain is challenged, and everybody is really running flat out and more capacity is coming online all the time, which is one of the advantages."

Nvidia currently has supply for 70% of the demand from current customers, said Huang during the call, adding that demand is "much higher than that." He said the company doesn't like to disappoint customers but it will take the help of the entire supply chain to get more compute capacity available.

The Dinner Circuit and Stock Moves

Huang's comments have become a focus of investor curiosity, with a blog tracking his dinners out around the world. "One of the funnest things to do is just to go figure out where I go for dinner, and who I have dinner with," said Huang during the call. "Their stock price doubles the next day."

Huang's social engagements have been linked to stock movements in the past. In 2024, Oracle founder Ellison said he and SpaceX CEO Musk took Huang to dinner at Nobu Palo Alto and "begged" Huang for more GPUs. The "Jensen Eats" blog reported Huang visited a barbecue restaurant in Korea in June, with SK Group Chairman Chey Tae-won, LG Group Chairman Koo Kwang-mo, and Naver founder Lee Hae-jin. In the run-up to the group outing, LG rose by 30% on reports that Koo would meet with Huang, and LG affiliates rose from 17% to 29%.

Last October, Huang had chicken and beers with Samsung Electronics chairman Jay Y Lee and Hyundai Motor executive chair Chung Euisun; shares of Cherrybro, Kyochon F&B, and Neuromeka rose, as reported by Bloomberg.

Outlook and Constraints

Nvidia's forecast of 70% revenue growth for the next fiscal year is described as supply constrained, with Huang noting that actual demand is "much greater than 70 per cent." The company's ability to meet demand is limited by its entire supply chain running flat out, with more capacity coming online over time.

Huang's comments on constraints came against the backdrop of the strong earnings report and the company's projection of significant growth, underscoring the tension between robust demand and the practical limits of production.