Nvidia’s China Exit and $1 Trillion Pipeline Set the Stage for a Defining Earnings Report

Nvidia's market share in China drops to zero, but CEO Jensen Huang pivots to a $1 trillion data center roadmap with Vera Rubin, backed by massive hyperscaler spending.

Jensen Huang has a knack for framing setbacks as strategic pivots. When the Nvidia CEO acknowledged this week that the company’s market share in China for AI accelerators has fallen to zero — down from 95% before US export restrictions took hold — he didn’t dwell on the loss. Instead, he pointed to a roadmap that could render the Chinese market almost irrelevant to Nvidia’s long-term trajectory.

The Vera Rubin platform, Nvidia’s next-generation architecture, promises to slash inference costs by up to 90% compared to the Blackwell generation. Combined with Blackwell, the company expects to generate roughly $1 trillion in cumulative data center revenue by the end of 2027. That pipeline, Huang argued, dwarfs what Nvidia has left on the table in China.

Huawei has already stepped into the void with its Ascend 950PR chip, while domestic players like Cambricon and Moore Threads are also gaining ground. Huang described the US export policy as “counterproductive,” warning it is accelerating China’s push toward semiconductor self-sufficiency.

Hyperscaler spending backs the bull case

The trillion-dollar pipeline isn’t just a talking point — it’s backed by concrete numbers from Nvidia’s biggest customers. Microsoft has earmarked roughly $190 billion in capital expenditures for calendar 2026, with the bulk directed at CPUs and GPUs. Amazon is planning $200 billion in spending this year, much of it flowing into its cloud division and generative AI projects.

These commitments align with what Nvidia has already signaled: orders for Blackwell and Vera Rubin are expected to total $1 trillion across 2026 and 2027. The company’s own results reinforce the momentum. In the fiscal fourth quarter of 2026, Nvidia posted record revenue of $68.1 billion — a 73% year-over-year jump. For the first quarter of fiscal 2027, it has guided for $78 billion, plus or minus 2%.

Supply chain signals a capacity buildout

Behind the revenue forecasts lies a dramatic shift in Nvidia’s procurement strategy. Supply-chain-related commitments surged nearly 90% to $95.2 billion, up from a range of roughly $28 billion to $30 billion in the first half of fiscal 2026. Inventories climbed to $21.4 billion. The message is clear: Nvidia is building capacity to stay ahead of demand, not just meet it.

The earnings report, due May 20, will test whether those commitments are translating into accelerated revenue growth. The quarter ended April 26, so the numbers are already in hand. The question is how far Nvidia can beat its own $78 billion guidance.

Competition heats up from all sides

Not everything is breaking Nvidia’s way. The hyperscalers that account for a significant portion of its revenue are also investing in custom application-specific chips. Counterpoint Research expects shipments of such custom ASICs to triple by 2027 compared to 2024 levels.

Nvidia’s countermove is strategic. Through its NVLink Fusion technology, the company is integrating third-party chips — including Marvell’s custom processors — into its proprietary interconnect network. That keeps Nvidia relevant in data centers where its own GPUs are being replaced by in-house designs. On the other side, AMD, Intel, and Broadcom have rallied behind the open UALink standard as an alternative to NVLink.

Marvell Technology has nearly doubled this year, fueled by demand for custom AI chips. Nvidia is still growing, but it no longer has the field to itself.

Stock near highs, earnings as the next catalyst

Nvidia shares trade at roughly €169, about 7% below the all-time high of €182 set in late April. The stock has gained roughly 5% since the start of the year. The relative strength index sits near 50, indicating neither overbought nor oversold conditions.

Institutional investors hold about 65% of outstanding shares, providing a stable ownership base but also limiting the potential for rapid upward moves.

Analysts have set a consensus price target of $275.25, backed by 48 buy ratings. The May 20 report will show how much of the China loss is already reflected in the numbers. If Nvidia can hit or exceed its $78 billion revenue target, the market may take it as proof that Vera Rubin and global AI demand can more than compensate for the exit from China.