Nvidia stock traded higher on Tuesday, extending a three-day rally as renewed speculation over a potential resumption of GPU sales to China lifted sentiment around US chipmakers.
At the time of writing, the Nvidia stock was up around 1% to trade at $185.50.
The stock has been attempting to finish the year on a stronger footing after facing pressure in recent weeks amid concerns over export restrictions, valuation fatigue, and volatility across the artificial intelligence trade.
The latest optimism follows a series of reports suggesting that US authorities may allow limited exports of advanced AI processors to China, reopening debate over how much incremental revenue companies such as Nvidia and AMD could generate if approvals materialise.
While no definitive decisions have been confirmed, the possibility alone has been enough to prompt analysts and investors to revisit upside scenarios that had largely been written off earlier in the year.
Analysts on Nvidia’s possible China win
Raymond James analyst Simon Leopold cautioned that forecasting the outcome remains difficult, given the number of unresolved variables.
These include the stance of Chinese regulators, the structure of US export licenses, and how newly proposed government fees would be reflected in pricing and accounting.
Still, Leopold outlined what he described as optimistic but plausible scenarios for both AMD and Nvidia.
For AMD, Leopold estimated that incremental revenue from China could reach roughly $500 million to $800 million, translating into about $0.10 to $0.20 of non-GAAP earnings per share upside.
Market speculation has centred on China-compliant accelerator orders potentially linked to Alibaba, with reports pointing to demand for 40,000 to 50,000 MI308 units.
At the midpoint of that range, Leopold noted that a chip priced at $15,000 could equate to approximately $675 million in revenue, likely spread across several quarters.
For Nvidia, the revenue opportunity is significantly larger.
Leopold estimated that a limited reopening of the China market could result in $7 billion to $12.5 billion in additional revenue, corresponding to roughly $0.15 to $0.30 of non-GAAP EPS upside in 2026.
Speculation has focused on the potential resumption of H200 GPU shipments to major Chinese hyperscalers and internet companies.
Even relatively modest volumes could have a meaningful financial impact.
Leopold wrote that “tens of thousands of units” sold at estimated average selling prices of $20,000 to $25,000 could quickly add billions of dollars in revenue, with longer-term scenarios involving as many as 350,000 to 500,000 units over time.
Despite this, Leopold stressed that China remains a relatively small component of Nvidia’s overall data centre business.
Growth through 2026 is expected to be driven primarily by US hyperscalers, sovereign AI initiatives, and enterprise customers as newer platforms continue to ramp.
Broader AI spending cycle provides additional support
Beyond China-specific developments, Nvidia’s rally also comes amid broader optimism around global AI investment.
Analysts at Barclays, cited in a CNBC report, said the US is in the midst of its largest capital expenditure cycle in decades, fueled largely by AI infrastructure spending.
According to the firm, AI-linked stocks have accounted for between 75% and 80% of the S&P 500’s earnings growth and total performance over the past three years.
Barclays expects easing financial conditions and a more favourable regulatory backdrop in 2026 to further support equity valuations, particularly for growth-oriented and cyclical sectors.
“When thinking about the critical drivers of risk assets and the economy at large heading into 2026, AI stands head and shoulders above the rest,” Barclays analysts said, adding that the scale of investment already underway makes it difficult to discount the sector’s future impact.
For Nvidia, that broader AI narrative remains the dominant long-term driver, even as investors continue to weigh the incremental — and still uncertain — upside from any reopening of the China market.
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