Nvidia's $78B Earnings Test Looms as China Export Row Deepens, Stock Slides 5%

Key facts

• Nvidia stock closed at €170.10 in Europe, down 5% on Friday, after four consecutive sessions of losses.
• Market capitalization retreated to roughly $4.8 trillion, days after briefly breaching $5 trillion.
• JP Morgan analyst Harlan Sur reiterated an overweight rating with a $265 price target, implying 32% upside.
• Nvidia's forward P/E ratio is about 42, but on a non-GAAP basis for the next twelve months it could drop below 24.
• US Senator Chris Coons demanded Commerce Secretary Howard Lutnick provide detailed data on H200 chip exports to China within a week.
• China's central government is blocking H200 imports, directing companies to buy from local suppliers like Huawei, Alibaba, or Baidu.
• China previously accounted for roughly one-fifth of Nvidia's data center revenue.
• Three major cloud hyperscalers plan to invest about $715 billion in AI infrastructure by 2026.

A Sudden Sell-Off After a Historic Milestone

Nvidia is navigating one of its most turbulent stretches in months, caught between a blistering growth outlook and a sudden flare-up of geopolitical risk that has already erased billions in market value. The chipmaker’s stock closed Friday at €170.10 in Europe — a 5% daily drop — after four consecutive sessions of losses that dragged its market capitalization back to roughly $4.8 trillion. That retreat came just days after the company briefly breached the $5 trillion threshold for the first time, a milestone that now feels distant. The sell-off has been sharp, but the narrative around Nvidia is far from one-sided. On the year, the shares have still climbed about 68%, and a growing chorus of institutional investors and analysts see the current pullback as a buying opportunity rather than the start of a deeper correction.

JP Morgan Sees 32% Upside as Valuation Becomes Compelling

Analyst Harlan Sur at JP Morgan has reiterated his overweight rating on Nvidia with a price target of $265, implying roughly 32% upside from current levels. Sur’s conviction rests on what he calls Nvidia’s “full-stack strategy” — the integration of GPUs, CPUs, and networking solutions that gives the company a structural advantage in the data center market. The valuation argument is gaining traction. Nvidia’s forward price-to-earnings ratio sits at around 42, but on a non-GAAP basis for the next twelve months, that figure could drop below 24. That multiple is set against expected earnings growth of 53%. By contrast, JP Morgan rates Intel as “sell” with a $45 target, underscoring how starkly the chip landscape has diverged.

Washington Wades In: Senator Coons Demands H200 Export Clarity

The political dimension is now impossible to ignore. US Senator Chris Coons has demanded that Commerce Secretary Howard Lutnick provide detailed data on chip exports to China within a week, specifically regarding Nvidia’s H200 AI processor. The request follows a direct contradiction between Lutnick’s testimony — in which he stated there were no sales to state-affiliated Chinese companies — and Nvidia CEO Jensen Huang’s earlier remarks that export licenses had been granted by both governments. The timing is delicate. President Donald Trump is set to travel to China in the coming weeks for a meeting with President Xi Jinping, and the H200 issue is likely to be a flashpoint.

Beijing Builds Its Own Barriers

Even if Washington clears exports, Beijing is erecting its own obstacles. China’s central government is blocking purchases of the chips to bolster domestic industry. Chinese customs authorities have halted H200 imports, with exceptions only for universities and research labs. Companies are being directed to buy from local suppliers such as Huawei, Alibaba, or Baidu. The financial impact is already material. Previously, China accounted for roughly one-fifth of Nvidia’s data center revenue. The diplomatic standoff is costing the company significant sums, and there is no clear resolution in sight.

Hyperscalers and Tesla Keep Demand Humming

Away from the political drama, demand from Nvidia’s biggest customers shows no signs of slowing. Tesla CEO Elon Musk has confirmed a sharp increase in AI training investments for the Optimus robot project and the Robotaxi initiative, and made clear that Tesla will continue buying Nvidia hardware even as it develops its own chips. The partnership is not up for replacement. The three major cloud hyperscalers — Alphabet, Amazon, and Microsoft — are also doubling down. Together, they plan to invest roughly $715 billion in AI infrastructure by 2026, nearly double last year’s figure. Amazon CEO Andy Jassy described the relationship with Nvidia as a “deep partnership,” emphasizing that the chips remain the gold standard for demanding AI workloads.

The Stakes of the Upcoming Earnings Report

With Nvidia’s next earnings report — expected to reveal $78 billion in quarterly revenue — just weeks away, the company faces a critical test. The combination of geopolitical headwinds and surging demand from hyperscalers and automakers will shape investor sentiment. The stock’s recent slide has made valuation more attractive, but the outcome of the US-China negotiations on chip exports could determine whether the pullback is a buying opportunity or a warning sign. For now, Nvidia remains at the center of the AI revolution, but its path forward is increasingly tied to political decisions in Washington and Beijing. The next few weeks will be decisive.

The bottom line

• Nvidia's stock fell 5% to €170.10, erasing its brief $5 trillion market cap milestone.
• JP Morgan sees 32% upside with a $265 target, citing a compelling valuation and 53% earnings growth.
• Senator Coons demands clarity on H200 exports to China, highlighting a contradiction between Lutnick and Huang.
• China is blocking H200 imports to boost domestic suppliers, costing Nvidia a fifth of data center revenue.
• Hyperscalers plan $715 billion in AI infrastructure by 2026, and Tesla is increasing AI investments.
• will test whether geopolitical risks outweigh strong demand.