Nvidia (NASDAQ: NVDA) announced it is not assuming any Data Center compute revenue from China in its financial outlook. The disclosure clarifies the company’s baseline expectations for future earnings amid ongoing trade restrictions.

Guidance Assumptions

The chipmaker explicitly stated that its outlook does not include any revenue from Data Center compute sales in China. This assumption reflects the current regulatory environment limiting advanced semiconductor exports to the region.

What the Numbers Show

The explicit exclusion of this revenue stream indicates that Nvidia’s reported guidance figures are derived entirely from non-China markets. This separation allows investors to assess the company’s core operational performance without the variable of potential policy shifts or restricted sales volumes in China.

Nvidia Corp’s upcoming earnings and the Federal Reserve’s Jackson Hole meeting are defining a dual-theme week for ETF investors, balancing artificial intelligence growth against higher-for-longer interest rates.

Nvidia Keeps AI ETFs in the Spotlight

Nvidia’s results serve as a test for the sustainability of the AI spending boom. John Belton, portfolio manager at Gabelli Funds, expects Nvidia to beat guidance, citing an "extremely tight" supply/demand environment for AI computing infrastructure.

Belton highlighted rising costs for cloud-based computing, noting that Nvidia A100 rental prices at major public clouds have risen about 15% over the past three months and 20% since the start of the year.

This backdrop supports semiconductor ETFs. The iShares Semiconductor ETF (NASDAQ: SOXX) offers diversified exposure to the chip cycle, while the VanEck Semiconductor ETF (NASDAQ: SMH) provides a concentrated basket of leaders.

Nancy Tengler, CEO and CIO at Laffer Tengler, described Nvidia as a long-term holding with "insatiable" demand. She pointed to the company’s efforts to mobilize $500 billion in third-party capital for AI infrastructure, suggesting benefits extend beyond chips to "pick and shovel" beneficiaries like Amazon and Eaton.

Jackson Hole Raises the Rate-Risk Question

Larry Holzenthaler, senior portfolio manager at Catalyst Funds, called this year’s Jackson Hole gathering "one of the more meaningful" in recent times due to persistent inflation, large deficits, and Fed policy uncertainty.

Holzenthaler noted that inflation remains above the Fed’s target and deficits are a renewed focus. He highlighted market anxiety over Fed Chair Warsh’s comments describing Jackson Hole as a "blank piece of paper" and recent high dissent rates at the Fed.

His advice for bond investors is to position for rates "higher than most people have been used to post the GFC." This creates an advantage for floating-rate and short-duration ETFs over long-duration Treasury funds.

ETFs Positioned for Higher-For-Longer Rate Regime

Holzenthaler suggested "staying shorter on the curve" using floating-rate assets and credit to sidestep volatility in longer-duration bonds.

What the Numbers Show

The divergence between rising AI infrastructure costs and fixed income strategies highlights a bifurcated market approach. While A100 rental prices rose 20% year-to-date, signaling strong operational demand in tech, bond managers are explicitly avoiding long-duration assets to mitigate rate risk. This suggests investors are segmenting portfolios: aggressive growth via semiconductors versus defensive income via short-duration credit.