Nvidia, AMD China Chip Deal: $700M Impact, $20B Profits

The AI sector is currently experiencing significant growth and investment, impacting various companies and industries. Nvidia and AMD are navigating a deal with the U.S. government that allows them to sell AI chips to China, with the government receiving 15% of the revenue. For Nvidia, this could mean paying $700 million per quarter, though investors are not overly concerned given the company's $20 billion in quarterly profits. While Nvidia's stock remains steady, AMD's stock is rising, as investors believe the deal benefits AMD more. China's interest in securing these chips is driven by a desire to bolster its own AI capabilities while also raising some security concerns. Meanwhile, Foxconn is seeing a surge in profits due to strong AI server sales, which now account for 41% of its revenue, surpassing iPhone sales at 35%. This shift has led Foxconn to increase its investments in AI-related infrastructure and data centers. Lenovo also reported strong growth, with revenue up 22% to $18.8 billion, driven by its AI strategy and focus on innovation. Hedge funds are increasing their investments in tech companies, particularly those benefiting from the AI boom. Even companies involved in building AI infrastructure, like Aecom, are seeing increased interest. Cisco's networking business is also experiencing growth due to the rising demand for AI data centers, reflecting the broad impact of AI on the tech industry.

Key Takeaways

• Nvidia and AMD can sell AI chips to China, with the U.S. government receiving 15% of the revenue.
• Nvidia could pay $700 million per quarter in taxes from China chip sales, but makes $20 billion in profit each quarter.
• Foxconn's AI server sales now account for 41% of its revenue, exceeding iPhone sales at 35%.
• Lenovo's revenue increased by 22% to $18.8 billion, driven by its AI strategy.
• Hedge funds are increasing investments in tech companies benefiting from the AI boom.
• AMD's stock is rising as investors believe the China AI chip deal benefits them more than Nvidia.
• China is aiming to strengthen its AI capabilities while raising some security concerns.
• Foxconn is investing more in AI-related infrastructure and data centers.
• Cisco's networking business is growing due to increased demand for AI data centers.
• The market rally is expanding beyond just the biggest tech companies, with firms like Aecom benefiting from AI infrastructure demand.

Investors see big potential in AI chip sales to China

Nvidia and AMD can now sell AI chips to China, giving 15% of the revenue to the U.S. government. Investors are excited about the revenue boost from access to the Chinese market. Nvidia's stock went up after the news, and the company could gain $15 billion. The U.S. wants rare earth magnets from China, and China wants powerful AI chips from the U.S. Some worry about national security since export controls are usually in place for a reason.

Nvidia or AMD who wins with China AI chip deal

Nvidia's stock is steady, but AMD's stock is rising after the U.S. government's AI chip deal with China. Investors think Nvidia would sell chips anyway, but the deal helps AMD more. Nvidia dominates the AI chip market, but AMD is a strong competitor. China is concerned about security and might not want to buy chips from American companies. China may be trying to get as many chips as possible while building up its own chip suppliers.

US government gets cut of Nvidia, AMD China AI chip sales

The U.S. government will get 15% of the money Nvidia and AMD make selling AI chips to China. Nvidia will share revenue from H20 chips, and AMD will share from MI308 chips. President Trump said it was a deal and called Nvidia's CEO Jensen Huang brilliant. This changes previous restrictions on chip exports meant to keep advanced AI tech out of China's military.

Nvidia's Trump tax doesn't worry investors focused on AI profits

Investors aren't worried about President Trump's 15% tax on Nvidia's chip sales in China. Nvidia could pay $700 million per quarter, but it makes $20 billion in profit each quarter. Nvidia's stock has nearly doubled since April, and AMD's stock is also up. Analysts expect Nvidia's earnings to grow by 44% on August 27. Some worry China might stop using Nvidia's chips, but investors are betting on strong demand for AI.

Nvidia's Trump tax doesn't worry investors focused on AI profits

Investors aren't worried about President Trump's 15% tax on Nvidia's chip sales in China. Nvidia could pay $700 million each quarter, but that's not much for a company making $20 billion in profit. Nvidia's stock has almost doubled since April, and AMD's is up too. Analysts think Nvidia's earnings will grow a lot. Some worry China might not use Nvidia's chips, but most investors are focused on the big demand for AI.

Foxconn's profit jumps as AI server sales beat iPhones

Foxconn's profit increased by 27% because of strong sales in AI servers. AI servers now make up 41% of Foxconn's revenue, more than iPhones at 35%. Foxconn expects its AI server business to grow over 170% this quarter. The company is also investing in electric vehicles and semiconductors. However, trade tensions and tariffs could create challenges for Foxconn.

Apple supplier Foxconn focuses on AI server sales now 41% of revenue

Foxconn, which makes iPhones for Apple, is now making more money from AI servers. AI server sales are 41% of their business, while iPhones are 35%. Foxconn expects AI server sales to increase a lot this quarter. They are also investing in data centers and taking a stake in TECO. Trade issues are causing Foxconn to move some iPhone production to India and invest in North America.

Hedge funds bet big on tech amid AI boom

Big hedge funds like Bridgewater, Tiger Global, and Discovery are investing more in Big Tech companies. They are focusing on companies that are growing because of artificial intelligence. Earlier in the year, some bets on Big Tech didn't do well because of worries about inflation and a possible AI bubble. Now, tech stocks are doing much better. Some hedge funds are also investing in UnitedHealth Group.

Cisco earnings preview networking growth amid AI datacenter demand

This article previews Cisco's upcoming earnings report. It focuses on how the company's networking business is growing. The growth is happening because of the increasing demand for AI data centers.

Lenovo reports strong growth driven by AI strategy

Lenovo had a strong first quarter, with revenue up 22% to $18.8 billion. Net income increased by 108% to $505 million. All main business groups grew, especially the PC business, which had its highest revenue growth in 15 quarters. Lenovo's success is due to its focus on hybrid AI, investments in innovation, and efficient operations. The company is committed to delivering new AI products and solutions.

Earnings live Foxconn boosted by AI demand Birkenstock beats Deere sinks

Earnings season is wrapping up with mostly positive results. Foxconn's profits jumped because of high demand for AI servers. Birkenstock beat profit estimates, while Deere's profit fell. Other companies reporting earnings include Circle, Lenovo, AMC, Cava, Cisco, CoreWeave, On, and Oklo. Overall, companies are doing better than expected, but there are still concerns about the economy.

AI 'pick-and-shovel' play market rally broadens

The market rally is expanding beyond just the biggest tech companies. Aecom is seen as a good way to invest in AI because it helps build AI infrastructure. Municipal bonds are also expected to do well. The market is showing signs of excitement, but some experts warn that things could change quickly.

Foxconn profits rise thanks to AI server sales

Foxconn's profits are up because of strong sales of AI servers. These servers are now the company's biggest source of income, beating out smartphones. The company's stock is doing very well because of this news. Foxconn expects AI server revenue to keep growing quickly.

Sources

• What investors see in the sale of AI chips to China
• Nvidia v. AMD: Who's Winning In Trump China AI Chips Move?
• The U.S. government is getting a cut from Nvidia and AMD's AI chip sales to China
• Nvidia’s Trump Tax of Little Worry to Investors Eyeing AI Riches
• Nvidia’s Trump Tax of Little Worry to Investors Eyeing AI Riches
• Foxconn’s 2Q25 Profit Jumps 27% as AI Server Sales Eclipse iPhones
• Apple Supplier Foxconn Doubles Down On AI: Server Sales Now 41% Of Revenue
• Hedge funds shift bets to double down on Big Tech amid AI boom
• Cisco Earnings Preview: Eyes on Networking Growth Amid Rising AI Datacenter Demand
• Strong Global Performance Driven by Clear Hybrid-AI Strategy, Investment in Innovation, and Operational Excellence
• Earnings live: Foxconn buoyed by AI demand, Birkenstock beats, Deere sinks
• An AI 'pick-and-shovel' play and signs that the market rally is broadening
• Foxconn profits top forecast, driven by AI server sales