From Regulatory Approval to Ecosystem Dominance: Nvidia’s Two-Speed Reality

Nvidia shares climb 4% on $81.6B quarterly revenue, SK Hynix's record $26.5B Nasdaq IPO, and unresolved H200 chip exports to China.

On a Friday that saw Nvidia shares climb 4.04% to €184.60, the company’s narrative played out on two vastly different stages. One was a courtroom drama over Chinese export licenses, the other a landmark IPO that underscored the sheer weight of capital now flowing through Nvidia’s supply chain. SK Hynix, the South Korean memory giant that supplies the high-bandwidth chips powering Nvidia’s next-generation architectures, raised around $26.5 billion in its Nasdaq debut — the largest ever US listing by a foreign company. Its valuation is now flirting with a trillion dollars, a direct measure of how deeply Nvidia’s ecosystem has burrowed into the global semiconductor industry.

SK Hynix controls 56.4% of the market for High Bandwidth Memory, specifically the HBM4 variant destined for Nvidia’s upcoming Vera Rubin platform, scheduled for delivery in the third quarter of 2026. The move signals that the AI infrastructure build-out is no longer just about chip sales; it’s about locking in the entire stack, from power management to compute architecture. Nvidia has already appointed Fluence Energy as the exclusive battery partner for its Vera Rubin reference design, providing two to three hours of buffer capacity. The company is effectively designing data centres from the grid up.

That long-term vision stands in stark contrast to the short-term uncertainty surrounding Nvidia’s business in China. The US Commerce Department has granted roughly ten Chinese companies — including Alibaba, Tencent and ByteDance — licenses to purchase the H200 chip, with a cap of 75,000 units per customer. Yet not a single chip has shipped. The deal remains caught in a legal grey zone between US export policy and Beijing’s evolving supply-chain rules. CEO Jensen Huang acknowledged at the NVIDIA GTC 2026 that the company has received purchase orders from Chinese clients and that production for that market has resumed, but no revenue has been booked.

Nvidia’s own guidance for the second quarter of fiscal 2027 — $91 billion, plus or minus 2% — deliberately excludes any contribution from its China data-centre business. That makes the H200 situation a pure binary: either deliveries start flowing in the current quarter and provide a surprise upside, or the legal impasse persists and China remains a headline rather than a revenue line. The company’s most recent quarter delivered $81.61 billion in revenue, up 85.2% year over year and ahead of analyst expectations, while net profit surged to $58.32 billion — more than triple the prior-year period.

The data-centre segment carried the load at $75.25 billion, a 92% increase, and management has disclosed $119 billion in outstanding delivery commitments. That backlog extends well beyond any single region, reinforcing the view that Nvidia’s core growth story does not depend on China. If the H200 shipments do eventually materialise, they would be a bonus on top of a projection that already excludes them. Technically, the stock sits 1.87% above its 50-day moving average with an RSI of 58.6, leaving room to run before becoming overbought. The consensus analyst target of €264.03 implies potential upside of roughly 43% from current levels.

The bear case, however, is not hard to construct. The regulatory green light is not a delivery, and the longer the legal standoff drags on, the more Chinese customers may shift to domestic alternatives such as Huawei. Huang himself was blunt on the company’s competitive position there: “We are 100% out of China. We went from 95% market share to zero.” Bernstein estimates Nvidia’s China market share could slide from 66% in 2024 to roughly 8% in the coming years. Meanwhile, the stock trades 12.02% above its 200-day average with a 30-day annualised volatility of 36.42% — leaving little cushion if the hoped-for catalyst fails to appear or if sentiment around AI investment cools.

Nvidia is also pushing into adjacent markets that could broaden its revenue base. The “Physical AI” segment, covering robotics and automated logistics, is forecast to grow 34% annually and reach $38 billion by the end of 2026. The company wants to provide the foundational platform for that shift, extending its reach beyond cloud computing into factories and warehouses. For the moment, though, the quarterly report for the second fiscal quarter of 2027 will serve as the clearest test. Markets will be listening not for the number of orders received, but for concrete shipment volumes to China — and for any signal that the legal logjam is breaking.