Nvidia CEO Jensen Huang said demand for AI chips will keep rising, even as the company’s Q3 sales forecast failed to impress markets.

Nvidia’s shares dropped nearly 2% to US$178.4 after the forecast, which excluded potential revenue from China due to US-China trade tensions.

Huang estimated global AI infrastructure spending could reach US$3 trillion to US$4 trillion by 2030.

He noted Nvidia’s high-end Blackwell chips are largely reserved through 2026, while its Hopper chips also remain in demand.

In the latest quarter, a customer outside China bought US$650 million worth of the H20 chip, designed for the Chinese market. But future sales in China remain uncertain as Nvidia seeks regulatory approval for newer products.

Industry analysts said capital spending by major tech companies continues to drive Nvidia’s growth, with no signs of a slowdown in AI-related investments.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Exceptional growth no longer guarantees market enthusiasm in maturing AI sector

Nvidia’s latest earnings reveal how dramatically investor expectations have shifted in the AI market.

Despite reporting $46.7 billion in quarterly revenue, a 56% year-over-year increase that would have been celebrated as extraordinary growth in most industries, the stock dropped 2% as markets viewed the results as “tepid”12.

This reaction demonstrates the market’s maturation from the early AI boom phase, where any positive news drove massive rallies, to a more sophisticated evaluation of sustainable growth trajectories.

Today’s muted response to strong results suggests investors have reset their baseline expectations far higher, requiring not just growth but acceleration to drive positive sentiment.

2️⃣ Geopolitical restrictions create complex market dynamics and arbitrage opportunities

Nvidia’s China situation illustrates how export controls can create unexpected market behaviors rather than simply eliminating demand.

While the company estimates it has lost $8 billion in potential Chinese sales due to export restrictions, a customer outside China purchased $650 million worth of Nvidia’s H20 chips, devices specifically designed for the restricted Chinese market12.

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