The $50 Billion Question: Nvidia’s Record Run Hinges on Both AI Infrastructure and a Surprise Diplomatic Trip

Jensen Huang’s last-minute invitation to join President Donald Trump on Air Force One for a trade delegation to Beijing caught even seasoned Nvidia watchers off guard. The chip chief boarded during a refuelling stop in Alaska, alongside Elon Musk and Tim Cook, for what amounted to an unscheduled sales pitch to reopen China’s market for Nvidia’s H200 processors. The trip came just as the stock notched a fresh all?time high in Frankfurt on Wednesday, closing at €193.84 and pushing the dollar?denominated market capitalisation above $5.5 trillion.

The diplomatic mission cuts straight to a long?standing headache for Nvidia. Although the US government has granted export licences for the H200, Beijing continues to block imports, forcing domestic champions Huawei and Alibaba to fill the void. Huang himself recently described Nvidia’s Chinese market share as effectively zero, while pegging the addressable opportunity at $50 billion. Analysts caution that a fundamental overhaul of semiconductor trade policy remains improbable, yet the direct involvement of technology chief executives signals that serious negotiations may be back on the table.

Wall Street wasted no time recalibrating its expectations. Bank of America lifted its price target to $320 from $300, reaffirming a Buy rating and pointing to roughly 45% upside. Wells Fargo followed with an upgrade to $315 from $265, while Morningstar held its fair value estimate at $260, citing Nvidia’s structural competitive moat. Of the 54 analysts tracking the stock, the consensus remains firmly at Buy.

The Bank of America call rests on more than just the China gambit. The bank has raised its estimate for the total addressable market of AI data?centre systems to $1.7 trillion by 2030 from $1.4 trillion, a revision that feeds directly into its revenue and earnings projections for fiscal 2028 and 2029 – both bumped up by 7%. Yet Vivek Arya, the analyst behind the upgrade, also flagged a steady erosion in gross margins of 30 to 50 basis points per year, driven by costly HBM memory, AMD’s MI450 series, and the custom silicon being developed by large cloud operators.

Should investors sell immediately? Or is it worth buying Nvidia?

The bullish thesis is increasingly tied to physical infrastructure build?out rather than chip shipments alone. Wells Fargo modelled its valuation on gigawatt?capacity expansion, and the numbers are staggering. Alphabet, Amazon, Meta and Microsoft are expected to pour almost $725 billion into capital expenditure by 2026, a figure that underpins the demand for Nvidia’s data?centre solutions.

All this sets the stage for Nvidia’s first?quarter fiscal 2027 earnings, due on 20 May. The company’s own revenue guidance stands at $78.0 billion, plus or minus 2%, while the Street consensus calls for $78.98 billion in sales and adjusted earnings of $1.78 per share. The data?centre segment alone is forecast to contribute roughly $73 billion. Options markets are pricing a swing of about 5.8% on the day.

China, however, remains the wild card. Nvidia’s current quarter?end forecast does not include any revenue from data?centre chips sold into the country. The impact has already been felt: last year the company took a $4.5 billion charge related to H20 inventory and purchase commitments, and subsequent export curbs erased an additional $8 billion in potential H20 sales. A later exception allowed H200 shipments, but with a condition that the US government receives 25% of the proceeds – a programme that has yet to generate any revenue.

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Looking further ahead, Nvidia’s product pipeline offers additional catalysts. The Computex trade show in June could see the unveiling of a new CPU, while the Vera Rubin architecture is slated for the second half of the year. Combined, the Blackwell and Rubin platforms are expected to generate cumulative revenues of $1 trillion by 2027.

The May 20 report will thus serve as a critical test. Strong AI demand, margin headwinds, and the China channel are converging in one earnings release. If Nvidia can maintain its revenue momentum without contribution from the world’s second?largest semiconductor market, the Bank of America’s upgraded market forecast will gain considerable weight.

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