Nvidia’s $5.5 Trillion Milestone Masks a Tangled China Equation

Nvidia's market cap tops $5.52 trillion amid AI hardware demand and hopes for China export resolution, with analysts raising price targets ahead of Q1 earnings.

Nvidia pushed deeper into uncharted territory on Thursday, with its market capitalisation eclipsing $5.52 trillion as the stock extended a blistering run. The Xetra-listed shares climbed 4.69% to €201.95, bringing the year-to-date advance to 25.36%. The rally reflects not only relentless demand for artificial-intelligence hardware but also mounting hope that a diplomatic solution to the company’s China problem is within reach.

That hope is far from assured. The US Commerce Department has granted export licences for Nvidia’s H200 AI accelerators to roughly a dozen major Chinese customers, including Alibaba, Tencent, ByteDance, JD.com, Lenovo and Foxconn. Each approved buyer is permitted to acquire up to 75,000 units. The political price, however, is steep: Washington is demanding a 25% share of the revenue from those sales, with the chips routed through US territory before delivery to avoid direct export duties. Yet physical shipments have not started. Chinese authorities are pressing domestic firms toward local alternatives, particularly from Huawei, leaving Nvidia’s once-dominant market share in the country effectively at zero.

Nvidia’s reliance on China has already shrunk. In the 2026 fiscal year, the region accounted for roughly 9.1% of total revenue, down from 13.1% a year earlier. The US market now supplies the lion’s share of sales. Still, the company’s chief executive, Jensen Huang, joined a high-level US business delegation led by President Donald Trump in Beijing—hopping aboard Air Force One in Alaska after being added to the guest list late—underscoring how deeply chip commerce and diplomacy are now intertwined. Huang has long argued for maintaining a presence in China, viewing the country as an integral part of the global technology ecosystem.

On Wall Street, analysts are racing to lift their price targets as the earnings picture brightens. Cantor Fitzgerald set a new target of $350, implying roughly 55% upside from the prior close, while maintaining an “Overweight” rating. UBS analyst Timothy Arcuri raised his target to $275, keeping a “Buy” call, and projected revenue of $81 billion for the current quarter—$3 billion above the midpoint of Nvidia’s own guidance. Wells Fargo now sees $315, and Susquehanna is at $275. The bullish consensus stems from continued heavy investment in AI infrastructure by cloud giants such as Amazon, Microsoft, Alphabet and Meta, which together are expected to pour $710 billion into AI data centres in 2026.

Nvidia will post its fiscal first-quarter results after the US market close on 20 May. Management has guided for revenue of $78.0 billion, a 77% jump from a year earlier, without counting any meaningful China-related data-centre sales because the H200 shipments remain stuck. The analyst consensus stands at $78.8 billion, with Goldman Sachs modelling roughly $80 billion. Gross margin expectations hover around 75%. For the second quarter, the market is already looking for $86.6 billion.

Away from the data-centre frenzy, the company’s gaming business is facing fresh cost pressure. Nvidia has informed partners of a $300 increase in kit prices for the GeForce RTX 5090 and the China-specific RTX 5090D V2, driven by tight supply and higher costs for GDDR7 memory. The suggested retail price for the RTX 5090 remains $1,999, squeezing margins for board makers such as Asus and Gigabyte unless they pass the expense on to consumers. In some markets, partner cards are already trading well above the official sticker.

Nvidia’s valuation, at roughly 20–25 times forward earnings, is not divorced from the profit trajectory. Institutional investors hold more than 65% of the stock. The company has surpassed silver in total market value and now trails only gold among global assets—a sign of just how powerful the AI narrative has become. Yet with the 20 May report approaching, the margin for error is razor-thin. The market is looking not just for growth, but for evidence of tight capacity, stable pricing and relentless cloud demand. A resolution in Beijing would add another lever to an already formidable business model, but it is not the anchor—the data-centre engine is.