Nvidia (NVDA) shares closed Tuesday at $220.78, just shy of an all-time high, after touching $223.75 intraday. The stock has surged roughly 12% over the past five sessions, climbing from $196.50 on May 5, as investor sentiment was buoyed by a confluence of political and corporate developments.
The catalyst for the recent rally appears to be CEO Jensen Huang's participation in President Donald Trump's visit to Beijing. The move has reignited speculation that the U.S. may relax export restrictions on Nvidia's H200 AI chips, which have been effectively barred from sale to Chinese customers. According to Reuters, Huang joined the delegation as part of a broader push by American companies to ease business restrictions, with Nvidia still seeking government approval to resume H200 sales in China.
Wall Street has responded positively. Susquehanna analyst Christopher Rolland raised his price target on Nvidia to $275 from $250, while Citi's Atif Malik maintained a $300 target. These upgrades reflect a broader optimism around AI infrastructure spending, though money is flowing more selectively down the supply chain. Analysts also boosted outlooks for other AI names such as AMD (AMD) and Broadcom (AVGO).
Earnings Expectations
Nvidia's fiscal first-quarter 2027 earnings are scheduled for May 20, with the company expected to report revenue of $78.0 billion, plus or minus 2%. That forecast notably excludes any data-center compute revenue from China, meaning even a modest policy shift could provide significant upside. In the previous quarter, Nvidia reported a 73% year-over-year revenue jump to $68.1 billion, with data-center sales climbing 75% to $62.3 billion.
CEO Jensen Huang has described enterprise demand for AI agents as 'skyrocketing,' with customers scrambling to secure compute capacity. The message has resonated: demand continues to outstrip supply, and Nvidia maintains its grip on the high-end training and inference market, despite increasing competition from Broadcom's custom silicon and AMD's GPUs.
Macro and Competitive Headwinds
Despite the bullish narrative, bears point to headwinds. The stock's elevated valuation leaves little room for error, and rising U.S. inflation—exacerbated by the Iran conflict energy shock—diminishes prospects for Federal Reserve rate cuts. Polymarket traders assign a 68% probability of no Fed cuts in 2026, with a 27% chance of a rate hike before year-end. Higher discount rates typically weigh on high-multiple growth stocks.
Competition is also intensifying. Alphabet (GOOGL) is expanding its custom AI silicon, already powering clients like Anthropic, while Broadcom and AMD continue to challenge Nvidia's market share. On Tuesday, the broader market retreated—the S&P 500 and Nasdaq both ended in the red—but Nvidia bucked the trend, underscoring its status as a key AI infrastructure play.
What to Watch
For the stock to sustain its momentum, management will need to deliver gross margins in the mid-70s, demonstrate that Blackwell demand continues to outstrip supply, and articulate a credible China strategy that does not hinge on a single diplomatic visit. The May 20 earnings call will be a critical test, but the real catalyst may come from any policy signals out of Beijing before then.
As Liu Qian, head of Wusawa Advisory in Beijing, noted, 'Keeping the status quo would already count as good news.' Investors will be watching closely.
