Wall Street Breakfast Podcast: Nvidia Forecasts Zero China Revenue (undefined:NVDA)

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Nvidia tops expectations, but forecasts zero China sales. (0:15) White House says it has fired newly-appointed CDC director. (2:28) Tesla European sales continue to slide. (3:25)

Nvidia (NASDAQ:NVDA) remains under pressure in premarket trading today as questions about its China sales overshadowed consensus-beating Q2 numbers on the top and bottom lines and a $60 billion share buyback.

After the bell Wednesday, the chip company reported EPS of $1.05, topping the consensus of $1.01. Revenue of $46.74 billion came in $610 million above expectations.

But while data center revenue jumped 56% from the year-ago period, the $41.1 billion reported was a tad below the $41.29 billion estimate. The company said it did not have any H20 sales to China-based customers in the second quarter, but it did benefit from a $180 million release of previously reserved H20 inventory, from approximately $650 million in unrestricted H20 sales to a customer outside of China.

Looking to the third quarter of fiscal 2026, Nvidia expects to generate $54 billion in revenue, plus or minus 2%. But crucially this guidance does not include any H20-related revenue to China. Analysts were forecasting $53.46 billion in revenue, with estimates up to $60 billion.

Seeking Alpha analyst Jack Bowman says: “One thing to watch is future sales to China, which NVDA is estimating at zero currently. If their sales to China are able to surprise next quarter, that could be a huge catalyst moving forward.”

SA analyst Agar Capital notes “the company has posted record revenues and given strong guidance for the next quarter without a single sale in China. If this is the baseline, even a partial return of the Chinese market — despite the 15% export fee — would represent a significant upside.”

Regarding that 15%, Nvidia CFO Colette Kress said on the earnings call that the company is still waiting for the Trump administration to formalize its plan to charge a commission on AI chip sales to China.

The U.S. government plans to “receive 15% of the revenue generated from licensed H20 sales, but to date, it has not published a regulation codifying such requirement,” she said.

In addition, Nvidia should be able to proceed with H20 sales to China without paying the commission if the plan isn’t codified, Kress told Bloomberg.

“We have been communicating. If nothing shows up, I’ve got licenses. I don’t have to do this 15% until I see something that is a true regulatory document,” she said.

Looking to healthcare, the White House says U.S. Centers for Disease Control and Prevention Director Susan Monarez has been fired after she refused to resign.

The move comes less than a month after she took office. In addition, four senior officials have left amid rising tensions over vaccine policies and public health measures. The CDC’s chief medical officer, the head of the center that issues vaccine recommendations, the head of the center that oversees vaccine safety and the leader of the office of public health data all submitted their resignations.

White House spokesman Kush Desai said late Wednesday Monarez was not “aligned with the President’s agenda of Making America Healthy Again.”

Since she had “refused to resign despite informing HHS leadership of her intent to do so, the White House has terminated Monarez from her position with the CDC,” Desai said.

Monarez’s attorneys denied she had resigned or had been fired, adding in a statement that “as a person of integrity and devoted to science, she will not resign.”

And Tesla’s (TSLA) European sales slumped 40% in July to 8,837 units. That’s the seventh-straight month of declines, even as overall EV sales rose, according to ACEA data.

Meanwhile, sales of Chinese rival BYD (OTCPK:BYDDF) (OTCPK:BYDDY) surged 225% year on year to 13,503 registrations, reflecting its aggressive expansion across Europe with competitively priced models.

Tesla faces stiff competition, brand challenges linked to CEO Elon Musk, and a lack of major model updates. The company plans to begin “volume production” of a more affordable EV in the second half of 2025, which investors hope will revive demand.

Chinese automakers held a record 5% market share in Europe in the first half of the year, according to data from JATO Dynamics, with BYD leading the charge. Other global brands like Stellantis, Hyundai, Toyota, and Suzuki also saw July declines, while Volkswagen, BMW, and Renault posted gains.

Now Here’s What’s Trending on Seeking Alpha:

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CrowdStrike (CRWD) dips as its Q3 revenue outlook falls short.

And YouTube (GOOG) and Fox (FOX) have reached a short-term extension to avert a blackout.

Taking a look at the markets, stock index futures are little changed despite Nvidia weighing. In the Treasury market there is a small reversal in the recent yield-curve steepening prompted by concerns about Fed independence.

And on the economic calendar today:

• 8:30 a.m. ET – The second estimate of Q2 GDP arrives. Economists expect little change from the initial estimate of a rise at a 3% annual rate.
• 8:30 a.m. ET – Weekly initial jobless claims. The consensus is for 236,000, about even with the previous week.
• 10:00 a.m. ET – July pending home sales. The forecast is for a 0.3% rise, swinging from a 0.8% decline in June.