Nvidia stock (NASDAQ: NVDA) jumped nearly 2% on Wednesday, following reports that Chinese tech companies have placed orders for more than 2 million of its H200 chips.
NDVA extended gains as traders reassessed the profit opportunity from China’s reopened market.
The move reflects growing confidence that the licensing approvals, already underway at the Treasury Department, could unlock substantial near-term revenue.
The $40 billion estimate is straightforward math: 2 million H200 units priced at $27,000 each, minus the 25% export surcharge that Nvidia must pay to the US Treasury.
It’s crucial to note, however, that orders do not equal shipped revenue. China must formally approve the imports, US licenses must clear final processing, and production capacity at Taiwan Semiconductor Manufacturing Company must ramp as planned.
Nvidia has already contracted with TSMC to boost H200 manufacturing in the second quarter, with a target to deliver additional units before the Lunar New Year in mid-February.
Nvidia stock: What $40 billion number actually means
The headline math is compelling, but investors should understand what’s conditional here.
Reuters reporting reveals that Chinese firms, including ByteDance, Alibaba, and Tencent, have already signaled intent to purchase 2 million units.
But actual sales depend on three factors: first, final US export license approval (still in process); second, Beijing’s green light for imports (not yet formally granted); and third, TSMC’s ability to ramp 4nm production within months.
CEO Jensen Huang deliberately tempered expectations at CES 2026 this week, stating he expects no formal announcement from either government and that purchase orders will be the only reliable signal of success.
“The customer demand is high. It’s quite high. It’s very high,” Huang said, yet he noted that Nvidia is “not expecting any press releases or large declarations.”
This caution reflects the political sensitivity as Washington controls the licenses, and Beijing has leverage over Chinese customer behavior.
History also matters here as Nvidia’s H20 chip won export approval last summer but was quietly discouraged by Beijing, leaving inventory stranded.
That experience explains why the market is hedging its bets even as it prices in optimism.
Can orders, approvals and production make gains stick?
Nvidia’s supply chain has been “activated,” Huang confirmed, with H200s already flowing through production pipelines.
The real bottleneck now sits with regulators on both sides of the Pacific.
US Treasury approval is in the final stages, and Treasury sources tell Reuters the government is “working feverishly” to finalise licenses.
Yet the timing is fluid as Nvidia has flagged a potential mid-February start, but that assumes approvals land on schedule.
The analyst community has largely ignored this catalyst in their models.
Wall Street’s consensus estimates for fiscal 2027 revenue stand at $320 billion, nearly double current-year expectations, but few forecasters have folded in the $40 billion China scenario.
If the company does unlock full H200 demand, top-line growth could jump to 69%, to roughly $360 billion, according to Motley Fool analysis.
At Nvidia’s current 21x forward price-to-sales multiple, that math alone could support significantly higher valuations.
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