Recent concerns on Wall Street regarding Nvidia stem from CEO Jensen Huang's alleged connections to a suspected Chinese spy, raising fears about a possible crackdown on the company's operations. New Street Research estimates that Nvidia could derive between $37 billion and $47 billion, or 10% of its total expected revenue of $411 billion for fiscal year 2027, from China.
This includes 6% classified as 'legal sales' into China and Hong Kong, while 4% is booked outside China, with half of that potentially diverted back into China. Following these revelations, Nvidia's stock fell approximately 5% in regular trading.
The U.S. government has imposed export controls on some of Nvidia's advanced chips, although Chinese firms have reportedly found ways to access Nvidia's technology through other countries. Nvidia has stated its commitment to comply with U.S. laws and collaborate with the AI ecosystem and government.
The situation is further complicated by an ongoing investigation by the Commerce Department, which has now been transferred to the Justice Department after Nvidia's general counsel reached out. As a key player in the AI industry, Nvidia's financial health and operational integrity are crucial not only for its investors but also for the broader tech landscape