Nvidia’s stock has recently stumbled, dipping 1.8% over the past month, trading at around $184.98 as of Friday. This is surprising given the booming interest in AI technologies witnessed during the recent Consumer Electronics Show (CES). While the company made waves with announcements surrounding robotics and autonomous driving, these developments failed to sway investors significantly.
However, the underlying demand for Nvidia’s products remains robust, driven by increased customer spending across various segments. Analysts from Truist Securities, including William Stein, highlight strong purchasing signals from hyperscalers, neoclouds, sovereign entities, and specifically from China. CEO Jensen Huang described the demand for the H200 chip as “very high,” hinting at a profitable 2026 ahead.
Nvidia has garnered orders for over 2 million H200 chips, which translates into a staggering potential revenue of approximately $54 billion at a unit price of $27,000 per chip. But the climate in China poses both an opportunity and a challenge.
China’s Order Pause Creates Uncertainty
Chinese authorities have recently advised certain technology firms to pause their orders. This move is a part of a broader strategy to assess how many domestically produced chips should be procured in conjunction with Nvidia’s offerings. While this pause introduces a degree of uncertainty, it is essential to note that Nvidia has received clearance to resume sales to China in 2026, after a hiatus that began in April 2025.
Despite facing potential export taxes, analysts see the Chinese market as too critical to neglect, given its size comparable to that of the United States. The outcome of this order pause is crucial; a resolution could trigger the necessary momentum for Nvidia’s stock to regain its trajectory.
Architectural Innovations Promising Future Rapid Growth
Expectations for Nvidia’s 2026 growth are ambitious, with projections indicating a 50% increase in revenues, fueled by the launch of the innovative Rubin chip architecture. This new architecture not only promises performance enhancements but also calls for significant infrastructure upgrades, marking a strategic win for Nvidia as it stands to benefit from both chip sales and auxiliary component requirements.
Current market indicators suggest that even Nvidia’s Blackwell chips are sold out, reflecting the ongoing demand for its offerings. With a trading multiple of 47 times trailing earnings, Nvidia’s valuation might appear high, but it is indicative of a company poised for growth, especially considering its impressive 62% year-over-year revenue boost in the latest quarter. Using forward earnings metrics, this valuation reduces to roughly 34 times projected 2026 earnings.
When contrasted with its peers in the tech industry, Nvidia exhibits a premium valuation, yet it consistently outpaces competitors in terms of growth rates. The company, boasting a market cap of $4.6 trillion, currently holds the title of the world’s largest public company.
Nvidia’s critical supplier, Taiwan Semiconductor Manufacturing Company (TSMC), is set to report earnings on Thursday. TSMC’s financial performance could provide deeper insights into the health of the AI chip market, which is expected to flourish as data center construction accelerates.
With projections indicating continued expansion in the AI computing market through at least 2030, Nvidia remains a pivotal player in shaping the future of artificial intelligence technology. As analysts observe the evolving landscape, Nvidia’s ability to navigate these challenges could redefine its market position in the coming years.
