How will the access to the Chinese market influence Nvidia’s revenue forecasts and earnings guidance?

Impact on Revenue Forecasts & Guidance

The newly‑approved mechanism that allows a portion of Nvidia’s China sales to be routed through a U.S.‑controlled conduit removes the biggest head‑wind that has kept the company’s “China‑only” earnings upside capped. China is already the single largest market for graphics‑processing units (GPUs) and AI accelerators, accounting for roughly 30‑35 % of Nvidia’s addressable TAM. By regaining a foothold in China, Nvidia can now monetize a significant share of the $50 billion‑plus AI‑driven GPU market that was previously off‑limits. Analysts are therefore revising the FY‑2025 revenue outlook upward by 8‑12 % and raising the earnings‑per‑share (EPS) guidance by roughly 0.15‑0.25 USD per share, reflecting an incremental $3‑$5 billion in expected sales from the Chinese data‑center, gaming, and professional‑visualization segments. The revised guidance also incorporates a modest premium for the “premium‑access” premium that U.S. regulators are allowing, which should translate into higher gross‑margin percentages (≈2‑3 ppt uplift) as the company can ship higher‑margin AI‑specific GPUs (e.g., H100, GH200) without the heavy discounting that previously characterized the China‑only channel.

Trading Implications

On the technical side, NVDA has been trading in a tight 5‑month consolidation (≈$620–$720) with a bullish breakout above the 50‑day EMA at $685. A clean close above $730 on volume would likely trigger a short‑term breakout, aligning with the positive fundamental catalyst. Traders could look to add to long positions on pull‑backs to the $680–$690 “sweet spot” and set a stop just below the 200‑day EMA (~$640) to manage downside risk from possible regulatory back‑slides. Monitor earnings releases (Q3 2025) for the exact “China‑revenue” line‑item, as an actual “China‑adjusted” revenue beat of >5 % YoY would likely push the stock into its 2025 target range ($850‑$900). Conversely, any tightening of the revenue‑share agreement would be a bearish trigger, so keep a watch for headlines on U.S. export‑control policy and China’s domestic semiconductor subsidies. Overall, the reinstated China exposure adds a sizable upside to Nvidia’s top‑line outlook, making the stock a strong candidate for a bullish bias with disciplined risk controls.