Nvidia to Become $5 Trillion Company With China Win

By Douglas A. McIntyre Published Jul 15, 8:45AM EDT

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The White House has decided to allow Nvidia Corp. (NASDAQ: NVDA) to sell H20 chips to China.
This could boost its market cap to nearly $5 trillion.

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Nvidia to Become $5 Trillion Company With China Win — © Shutterstock / rafapress

Nvidia Corp. (NASDAQ: NVDA | NVDA Price Prediction) CEO Jensen Huang has wanted one thing more than any other recently. His company has been locked out of China. The market for AI accelerators in China is worth $50 billion. Nvidia sold $17 billion worth of chips there last year. Then the U.S. government blocked sales. This helped the stock drop from $133 in January to $95 in May.

Nvidia’s strength as the backbone of artificial intelligence got its stock up to $170 recently, which made it the first company in history to have a market cap of $4 trillion. Now that Huang has gotten his way in China, that number should press toward $5 trillion.

The Trump administration’s decision to allow Nvidia to sell its H20 chips in China will add billions of dollars to its already exploding revenue. The H20 is slightly less powerful than Nvidia’s top-line chips.

While there is no exact figure for the China-driven rise in Nvidia sales, it will bolster what is already year-over-year growth of 60% to 70% in revenue per quarter. In its most recently reported quarter, revenue rose 69% to $41 billion. It forecasts revenue in the current quarter to be $45 billion, plus or minus 2%. However, Nvidia said, “This outlook reflects a loss in H20 revenue of approximately $8.0 billion due to the recent export control limitations.” If that $8 billion is added, the company’s growth rate could move closer to 80% year over year.

China is just a bonus. Nvidia’s market share is estimated at 90% of the AI chips used to build server farms, which are at the center of the AI growth of every company in the sector. The largest of these are Microsoft, Meta, Amazon, and OpenAI. There are dozens of AI companies in the tier just below that.

Some analysts who cover Nvidia already have price targets at $200, which is almost 20% above the current level. That would take its market cap to about $4.9 trillion. China could get it there.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.