Nvidia and Apple show how China failures are no barrier to unparalleled stock market success

Nvidia and Apple are the two most valuable publicly traded companies in the world. One big thing the two tech behemoths have in common: they’ve ascended to those lofty heights despite their China businesses being in the penalty box this year.

Tariffs have weighed on Apple’s operations, and its sales in Greater China are down year on year in eight of its last nine quarters. Nvidia has been effectively shut out of China’s AI market for much of the year due to export restrictions.

And yet...

Apple’s latest earnings report propelled the company to hitherto unseen heights despite sales in Greater China coming in at $14.5 billion, 11.8% shy of estimates and down 3.6% year on year.

Nvidia CEO Jensen Huang just said he doesn’t know if he’ll ever be able to sell Blackwell chips to China. But that hasn’t stopped the chip designer from booking more than $500 billion in orders for its Blackwell and Rubin AI GPUs through next year.

Success, despite a lack of ability to boost sales in the world’s second-largest economy, tells us two very different things about these two market leaders.

For Apple, it speaks to its moat, brand, and platform, which enable its Services revenues to continue to climb, even if the iPhone upgrade cycle is less about how good the new phones are and more about how old customers’ existing phones are — iPhone buyers are a loyal bunch.

On the other hand, Nvidia is all about that AI boost — which has been meaningfully accelerated by the hundred of billions that most megacap tech leaders are eager to spend to develop and implement this new technology. And they’re able to do that because of how strong their existing businesses are.

The Takeaway

These ascensions to $4 trillion market caps (and beyond!) in spite of China challenges aren’t just an Apple and Nvidia story, but rather one that’s broadly reflected in the performance of most US stocks that have elevated sales exposure to the world’s second-largest economy.

To put it plainly: “China-exposed company” is just another term for “high-growth company.”

Who needs China anyway ??