Why Nvidia’s $5.7 Trillion Valuation Hinges on a Chinese Stamp of Approval

Nvidia receives US clearance to sell H200 processors to Alibaba, Tencent, and others, but Chinese government approval still needed. Stock hits record high amid analyst upgrades.

The world’s most valuable chipmaker just got a green light from Washington to sell its H200 processors to a handful of Chinese tech giants — but the goods remain stuck at the border. Nvidia’s stock has surged to new heights on the diplomatic breakthrough, yet the real prize still depends on a sovereign decision in Beijing.

CEO Jensen Huang was a last-minute addition to Donald Trump’s official delegation to Peking, boarding Air Force One alongside the heads of Apple, Tesla and Boeing. The symbolism was deliberate: China accounted for nearly a quarter of Nvidia’s total revenue before the Biden-era export curbs were tightened. An invitation from the president himself signaled that the White House sees the AI chip champion as central to broader trade talks.

Licenses Granted, Deliveries Delayed

The US Commerce Department has now authorized approximately ten Chinese companies to purchase Nvidia’s H200 accelerators. The approved buyers include Alibaba, Tencent, ByteDance and JD.com, with Foxconn and Lenovo designated as authorized distributors. But the paperwork from Washington is only half the battle.

US Trade Representative Jamieson Greer confirmed on May 15 that the final say on whether those chips physically enter China rests with the Chinese government. “It is a sovereign decision,” he told reporters, adding that semiconductor export controls were not a core topic during the formal negotiations. The first batch of licenses was processed in December, with tighter conditions imposed in January — and still not a single chip has been delivered.

Record Highs and a Stubborn Gap

The market has nonetheless piled on optimism. Nvidia shares touched a new all-time high of $236.46 in New York, pushing the company’s market capitalisation to roughly $5.7 trillion — briefly exceeding the entire value of silver as an asset class. In Frankfurt, the stock hit €201.05 before retreating to €198.26 on Friday, a 1.4% dip.

Over the past week, the stock is still up 8.58%, and since the start of the year it has gained 23.07%. The rally looks even more dramatic on a 12-month basis: the shares are now trading 63% higher than a year ago.

Analysts Rush to Raise Targets

The combination of a potential China reopening and insatiable AI infrastructure demand has triggered a flurry of price target upgrades. Wells Fargo lifted its target to $315 from $265, forecasting that global AI computing capacity will expand from 9.2 GW to 25.2 GW by 2029. Cantor Fitzgerald now targets $350, arguing that Nvidia’s production for 2026 and 2027 is effectively sold out thanks to the boom in agentic AI.

UBS went a step further, raising its price target to $275 from $245 and predicting first-quarter revenue of $81 billion — $3 billion above the official guidance. Bank of America hiked to $320 from $300, estimating the total addressable market for AI accelerators at $1.2 trillion.

Jensen Huang himself has floated an even bigger ambition: he reckons Nvidia could generate up to $1 trillion in cumulative revenue from its Blackwell and next-generation Vera Rubin platforms by 2027.

Earnings, Buybacks, and the Next Architecture

All eyes now turn to May 20, when Nvidia reports results for the first quarter of its fiscal 2027. The market consensus calls for revenue of roughly $78.8 billion and adjusted earnings per share of $1.77. Goldman Sachs believes a $2 billion beat relative to that consensus is within reach. Particularly crucial will be the outlook for the data-center segment, which Nvidia has been careful to keep free of China-related uncertainty in its projections.

Behind the headlines, another shareholder-friendly move is brewing. Sources point to a potential share buyback programme worth as much as $150 billion over the next twelve months — a proposal that could emerge as a formal agenda item and further underpin the stock.

On the product front, the Vera Rubin architecture is slated to enter mass production in September or October, with server racks expected to roll out later this year. That timeline would keep Nvidia at the centre of the next wave of AI infrastructure spending, where cloud providers alone are expected to invest more than $720 billion in 2026.

For now, the bull case rests on a delicate equilibrium: the H200 shipments to China remain a wild card, not a certainty. If Beijing eventually stamps the import approvals, Nvidia can fold a once-vital market back into its forecasts. If not, the stock will have to prove its $5.7 trillion valuation on the strength of everything else. The next few weeks — starting with earnings — will be the first real test.