Nvidia Shares Face Crosscurrents of Geopolitics and Demand

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Nvidia finds itself navigating conflicting signals. While its supply chain points to unprecedented demand for artificial intelligence semiconductors, a new legislative threat from Washington could severely restrict its access to the critical Chinese market. The stock closed Wednesday’s session at $184.84, with political uncertainty applying the brakes to its recent momentum.

The geopolitical landscape shifted significantly mid-week. A committee within the U.S. House of Representatives voted 42 to 2 in favor of legislation that would institute a complete, two-year ban on exports of Nvidia’s advanced “Blackwell” chips to China.

This legislative move directly contradicts earlier market speculation that a potential Trump administration might permit such exports subject to a 25% tariff. Should the bill successfully pass both the House and the Senate, the barrier would transform from a financial hurdle into an absolute blockade. Market analysts estimate this poses a risk to approximately 10-15% of Nvidia’s regional revenue, a concern compounded by the prior exclusion of its H200 GPU from the Chinese market.

Conflicting Signal from Manufacturing Partner TSMC

Counterbalancing the political headwinds, a key signal emerged from Taiwan Semiconductor Manufacturing Company (TSMC), Nvidia’s primary manufacturing partner. On the same day, TSMC confirmed the enduring strength of AI-related demand.

The chip foundry reported fourth-quarter revenue of $33.7 billion, a 25% year-over-year increase that surpassed expectations. More tellingly, TSMC outlined capital expenditure plans between $52 and $56 billion for 2026. The company further projected that its AI-related revenue would grow at a compound annual rate of 55% through 2029. These figures are viewed as a direct proxy for Nvidia’s order book, indicating robust future demand for its upcoming Rubin and Blackwell architectures.

Wall Street’s Stance and Market Rotation

Despite the rising geopolitical risks, major financial institutions on Wall Street are maintaining their bullish outlook. JPMorgan reaffirmed its “Overweight” rating on the stock. Meanwhile, Jefferies raised its price target from $250 to $275 per share. The current average analyst price target stands at $263.

Concurrently, a sector rotation is underway. Investors have begun shifting capital toward memory chip manufacturers and smaller AI-focused companies. This trend helps explain why Nvidia’s shares, with a gain of just 3% over the past six months, have significantly trailed the broader S&P 500 index.

Strategic Move with AI Startup Groq

Amid these developments, Nvidia executed a strategic maneuver to bolster its technology portfolio. The company entered into a $20 billion agreement with AI startup Groq. Structured as a licensing and personnel contract, this arrangement is designed to circumvent potential antitrust scrutiny.

The transaction secures Nvidia access to Groq’s inference technology and brings CEO Jonathan Ross into the fold. This acquisition strengthens Nvidia’s strategic position in the emerging fields of “Physical AI” and robotics.

The path for Nvidia’s share price now hinges on which narrative gains dominance: the record demand confirmed by its partner TSMC, or the looming legislative shutdown of a major market. While the company’s fundamental business metrics remain robust, a heightened political risk premium is currently preventing a sustained breakout above the $185 level.