Nvidia’s $5.4 Trillion Rally Collides with a High-Stakes China Diplomatic Mission

Nvidia CEO joins US delegation to Beijing amid export controls on AI chips, while stock hits all-time high on $725B hyperscaler spending forecast and upcoming Vera Rubin chip.

Jensen Huang was on a plane to a potential market-opening pivot just as his company’s stock was closing at an all-time high. The Nvidia chief executive received a last-minute phone call from the US president on May 13, boarded Air Force One in Alaska and joined a high-level delegation bound for Beijing. The group includes Apple’s Tim Cook, Tesla’s Elon Musk, and is scheduled to meet Chinese leadership on Thursday and Friday — a diplomatic gambit that overlays a critical earnings report due in less than a week.

The timing is anything but coincidental. Huang’s presence in China comes as Nvidia’s H200 accelerators remain under strict export controls with no clearance for sales to the country, a market that was once a significant revenue contributor. Huang suggested he aims to support national objectives and represent US interests, but the subtext is clear: any movement on licensing could redraw the company’s revenue trajectory. For now, China business is excluded from Nvidia’s own guidance of $78 billion in revenue for the current quarter.

Meanwhile, the stock has been on a tear. Shares hit an intraday record of $223.75 on Tuesday, pushing the market capitalisation above $5.4 trillion. The rally stands in sharp contrast to the broader chip sector: the PHLX Semiconductor Index fell nearly 5% on the same day, a day after it had touched an all-time high itself. Nvidia is decoupling from its peers on the back of a single, powerful narrative — hyperscaler spending that shows no sign of cooling.

The numbers are staggering. Consensus estimates peg AI-related capital expenditure from Microsoft, Amazon, Alphabet and Meta at roughly $725 billion in 2026, up 77% from the prior year. Morgan Stanley goes further, projecting $805 billion from the largest cloud operators in 2026 and $1.1 trillion by 2027. Not all of that money flows directly to Nvidia, but the company sits at the choke point of the AI infrastructure supply chain.

Analysts have been racing to update their models. Wells Fargo lifted its price target on Nvidia from $265 to $315 on May 12, maintaining an Overweight rating. Analyst Aaron Rakers built his case around power consumption: he sees relevant data-centre capacity rising from 9.2 gigawatts to 25.2 gigawatts by 2029. For the current fiscal year, Wells Fargo expects data-centre revenue of $354.5 billion, a figure that sits slightly above the Street consensus. Susquehanna followed with a target increase to $275 from $250, citing the production ramp of the GB300 platform and the upcoming Vera Rubin architecture.

Vera Rubin is the next major product cycle. Nvidia promises ten times the inference performance and a tenfold reduction in cost per token compared to current chips, aiming to power real-time AI applications at scale. Test production is scheduled to start in June, with shipments to major North American cloud providers — AWS, Google Cloud, Microsoft, and Oracle Cloud Infrastructure — beginning in July. The platform should be available to partners in the second half of 2026, keeping the technology refresh timeline tight.

That technological lead remains the core argument for the stock’s valuation. Nvidia’s share of the AI accelerator market stood at 86% in 2025, unchanged from the previous year. But the bar keeps rising. The average analyst price target across 37 experts is $272, implying roughly 26% upside from current levels — a bullish consensus that also reflects the elevated expectations.

Away from the spotlight of China and earnings, the company disclosed a change in Huang’s compensation. His total pay for the fiscal year 2026 dropped to $36.3 million from $49.9 million, mainly due to lower equity awards. His base salary held at $1.5 million, with a $6 million bonus, while performance-linked shares carried an estimated value of $141.3 million.

In European trading, the stock closed at €188.16 on Tuesday, exactly at its 52-week high, and has gained 16.80% year-to-date. The relative strength index stands at 56.4, in neutral territory, and the share price is 18.80% above its 200-day moving average — technical signals that suggest an intact trend rather than an overheated one.

All eyes are now on May 20, when Nvidia reports fiscal first-quarter results for its 2027 financial year. The consensus calls for $78.8 billion in revenue and earnings per share of $1.77, close to Nvidia’s own guidance. But the market will focus on the outlook for the second quarter, where analysts expect $86.6 billion in revenue — an 85% year-on-year leap. Deliver that number, and the AI investment thesis gains fresh fuel. Miss it, and the geopolitical overhang from Beijing could magnify the downside. For now, Nvidia’s story is written in two capitals: Washington and Beijing, with a reckoning in Santa Clara.