The $1.1 Trillion AI Bet That Can't Solve Nvidia's China Puzzle

Goldman Sachs forecasts $1.1 trillion in AI infrastructure by 2027, but Nvidia’s stock lags as China’s import ban and domestic chip push slash its market share to near zero.

Wall Street is penciling in record-breaking artificial intelligence infrastructure spending, with Goldman Sachs now forecasting tech giants will pour roughly $1.1 trillion into the space by 2027 — and potentially as much as $1.4 trillion in the best-case scenario. Nvidia stands to be the primary beneficiary of that wave, yet the stock continues to trade nearly 10% below its May all-time high of €202.50, stuck at €183.14. The culprit is not demand, but a geopolitical quagmire that no amount of capital spending can dislodge.

The H200 chip saga encapsulates the frustration. Washington has granted roughly ten Chinese companies — including Alibaba, Tencent, ByteDance and JD.com — licenses to buy up to 75,000 H200 units each, with Lenovo and Foxconn acting as distributors. On paper, that looks like a thaw. In practice, not a single dollar of revenue has materialized. Nvidia’s CFO acknowledged on an earnings call that the company has obtained approval for small quantities of H200 products for Chinese customers, but followed with a blunt caveat: “We do not know whether any imports will be allowed into China.”

Beijing’s hesitation is calculated. A vestige of the Trump-era agreement would require 25% of chip proceeds to flow back to the United States, a provision that China sees as a security risk — an extra link in the supply chain that could create vulnerabilities. Meanwhile, cities like Hangzhou are actively subsidizing local companies that run AI models on domestic chips from Huawei and others. The financial incentive to shun American technology is effectively baked into China’s industrial policy. Jensen Huang admitted in April 2026 that Nvidia’s market share in China has fallen to virtually zero — a stunning fall from the roughly 95% it once commanded for advanced AI chips, and a sharp contrast to the 13% of total revenue the country contributed as recently as fiscal 2025.

The irony is that the China blockage has not dented Nvidia’s global dominance. It has merely capped it. The company still controls an estimated 85% to 92% of the AI accelerator market, with AMD and Intel together clinging to single-digit shares in the training segment. And the next architectural leap is already live: Huang confirmed at GTC 2026 that the first Vera Rubin rack is running at Microsoft Azure, with full production deliveries slated for the second half of 2026. The new platform promises inference at up to ten times lower cost per token versus Blackwell and can train mixture-of-experts models with four times fewer GPUs.

Yet even as hyperscalers such as Amazon, Google and Microsoft remain Nvidia’s largest customers, they are also building their own custom silicon — their share of the total market is expected to climb from roughly 21% in 2025 to nearly 28% in 2026. That structural tension has historically resolved in Nvidia’s favor, but the question of how long that lasts lingers.

On the trading floor, the stock is in a wait-and-see posture. The relative strength index sits at a neutral 51.5, and the share price is barely 3% above its 50-day moving average of €177.93. The annualized 30-day volatility of 42.33% underscores how acutely each geopolitical headline is being priced in. The consensus analyst target of €257.45 implies roughly 40% upside from current levels — a target that likely does not fully discount the China risk, but also does not account for the upside of a potential reopening.

Huang himself tried to oil the gears in May 2026 by accompanying President Trump on a state visit to China, visibly angling for a breakthrough on H200 shipments. The goodwill gesture yielded no confirmed deliveries. For shareholders, the next key date is June 24, when Nvidia holds its virtual annual meeting to vote on board compensation and elections. In the nearer term, Wednesday’s Federal Reserve interest-rate decision will set the tone for the broader market.

In the meantime, large investors are quietly positioning. Nicolet Advisory Services recently boosted its stake by nearly 20%, holding more than 117,000 shares. The logic is clear: Nvidia’s structural strength in AI is intact, its Vera Rubin ramp is on track, and China, while a dead weight today, remains an option that could swing open at any moment. That optionality — unvalued, unresolved, and perhaps the most intriguing piece of the puzzle — is what keeps the story alive even as the export channel stays stubbornly shut.