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Luke Kawa

Commerce Department tweaks export rules, paving the way for Nvidia to ship H200s to China

US President Donald Trump’s call for Nvidia and its peers to be able to sell advanced AI chips to Chinese customers has evolved from the realm of social media posts to official policy paperwork.

The Department of Commerce’s Bureau of Industry and Security revised its export license review policy for certain semiconductors, laying out what kinds of chips Nvidia and other semi companies will be allowed to ship to China and the terms of this arrangement.

For chips with a total processing power of less than 21,000 and a DRAM bandwidth of less than 6,500 gigabytes per second, a group that includes Nvidia’s H200 as well as AMD’s MI325X, “this final rule specifies certain conditions that, if satisfied, allow for license applicants to move from a presumption of denial to a case-by-case license review policy for exports from the United States destined to China or Macau.”

Two of the key stipulations include:

  • These products must be readily available in the US for those who want to buy them; and

  • Aggregate shipments of these chips to China and Macau can’t exceed 50% of their total end use by US customers.

H200s are the most advanced chips from the Hopper line, which was Nvidia’s leading offering prior to Blackwell.

While Trump’s Truth Social post on December 8 indicated that 25% of the proceeds from sales of these chips to China would go to the US government, there is no reference to such a provision in this particular document.

Chinese buyers have reportedly put in orders for more than 2 million H200s, making this a potential $54 billion sales channel for the world’s most valuable company.

However, the willingness of Chinese officials to allow that many processors to be imported at a time when they’re also focused on developing their domestic chip capabilities remains an open question.

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markets
Helena Cheng

Lululemon’s stretch getting tested: Stock plunges after after outlook is cut

Lululemon shares are down double digits in premarket trading after the company cut its full-year sales and profit outlook, overshadowing a Q1 beat and raising fresh concerns about the brand’s turnaround efforts.

The company now expects fiscal 2026 revenue to be flat to down 1%, compared with its prior forecast for 2% to 4% growth. Guidance for full-year diluted earnings per share was dragged down to a range of $10.95 to $11.15, below the company’s previous guidance of $12.10 to $12.30 and well below Wall Street’s estimate of $13.26.

Key numbers for Q1:

  • EPS of $1.69 vs. the $1.68 expected.

  • Revenue of $2.47 billion vs. the $2.43 billion expected.

The modest top-line beat masked a widening divergence between Lululemon’s geographic markets. While international revenue rose 22% overall with a 30% increase in Mainland China, the bigger problem remains North America, where revenue fell 5%.

Interim co-CEO and CFO Meghan Frank acknowledged during the earnings call that recent product rollouts underperformed. A highly anticipated yoga campaign failed to generate its expected “halo effect” across broader product lines.

Profitability metrics took a major hit, with gross margins contracting by 410 basis points to 54.2% due to mounting tariff costs and promotional markdowns. Operating income consequently fell 37% year over year to $276.9 million.

“We experienced spikes of negative commentary in the media and on social channels with regard to our brand, which had an impact on traffic and overall top-line performance,” Frank said during the earnings call. “And second, not all of our product launches have met our expectations. While we have had several successful launches so far this year, we have seen others as we start Q2 not generate the anticipated guest response.”

Lululemon’s valuation has already been steadily compressing for years. While it was once one of retail’s richly valued stocks, investors have been questioning whether the company can return to the double-digit growth era.

The results also arrive during a leadership transition. Lululemon announced back in April that former Nike executive Heidi O’Neill is set to take over as CEO in September, with investors looking to her to revive growth in North America and restore the brand’s growth.

As Lululemon faces both macroeconomic pressure and brand-specific challenges, its stock has dropped around 40% year to date.

markets
Paige Oamek

US job growth skyrocketed in May, blasting past expectations

The US economy added 172,000 jobs in the month of May, the Bureau of Labor Statistics reported Friday, sending 10-year Treasury yields higher.

The strong May job market surprised economists. Experts had predicted only 85,000 new jobs — just half the reported number. The unemployment rate held steady at 4.3%, as expected.

The job growth story is a hopeful spot for the economy as consumers continue to feel inflationary pressure from the Iran war.

Job gains were buoyed by the leisure and hospitality sector, which added 70,000 jobs, as well as local government, healthcare, and education.

Both the March and April jobs reports were revised upward, making them collectively 93,000 higher than previously reported.

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