NVIDIA’s latest quarterly results highlighted the company’s continuing strength in artificial intelligence compute, but also left questions for investors focused on China.

UBS said in a note following the company’s release that NVIDIA “maintained its streak of solid results beat, with better-than-expected results for the quarter that ended on 31 July.” 

The bank noted that “while guidance indicates strong sequential improvement, the lack of clear visibility around China-related AI chip shipments may have disappointed a few AI bulls.”

AI compute is expected to drive nearly 60% of global AI capital expenditure in 2025, UBS said, adding: “We expect global AI capex to grow by 67% in 2025.” 

That momentum is said to underpin what the bank described as “strong top-down tailwinds for GPU makers like NVIDIA.” 

At the same time, UBS cautioned that “investors cannot be too complacent and ignore some of the bottom-up headwinds that may emerge over the next 12 months around developments in the supply chain and also potential market share shifts.”

China remains a focal point. Before U.S. restrictions imposed in April, China represented only a low- to mid-teen percentage of NVIDIA’s revenue, UBS noted. 

However, “any clarity about the resumption of AI chip shipments will likely be a catalyst, and the lack of clarity remains a near-term uncertainty.”

Beyond China, UBS highlighted potential demand normalization after strong first-half front-loading ahead of NVIDIA’s next major chip launch in 2026.

While it expects NVIDIA’s dominance to continue through 2025, UBS said the arrival of new competitive products in 2026 could reshape the landscape.

“We therefore believe any supply chain order shifts will likely create some noise,” UBS said, adding that “the evolving AI compute landscape highlights the case for a diversified exposure.”