Nvidia's $5.5 billion sales to China, about 13% of its total, are significantly impacted by a new 15% sales tax from the U.S. Trump administration. The tax affects around $5 billion of sales, translating to a potential $700 million tax contribution quarterly. However, with profits at $20 billion per quarter, this tax is manageable. Despite initial share price slips, Nvidia's stock has nearly doubled this year. Concerns linger about China's push to limit sales of Nvidia's chips but overall market momentum remains strong.
In the first quarter, Nvidia said it sold $5.5 billion in products to China, roughly 13% of its total. The chips exposed to the Trump tax accounted for about 80% of that, or just under $5 billion.
Nvidia's profits amount to $20 billion a quarter, meaning the tax could bring about $700 million per quarter to the Treasury, which barely registers for the company.
Nvidia shares, which have nearly doubled since early April, slipped slightly after the tax announcement but rebounded to set a new record.
Beijing has encouraged local firms to avoid using Nvidia's chips, raising concerns about potential limitations on sales.
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