Nvidia's China Comeback: H20 Chip Sales Approved, Stock Surges Amid AI Expansion

Analysts raise Nvidia price targets after Trump's China chip decision. One sees $5 trillion market cap ahead

Nvidia cleared a key hurdle that restricted the sale of its H20 chips to China, a move that gave some analysts on Wall Street room to raise their forecasts for the stock. The Jensen Huang-led company whose chips power artificial intelligence said earlier Tuesday that it hopes to soon resume shipping H20 general processing units to China after the U.S. lifted restrictions placed on their sale to Beijing in April. "The U.S. government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon," the company said in a Tuesday blog post . The statement helped lift an array of other semiconductor manufacturers as well. The news helped ignite a wave of optimism from analysts, with one going so far as to forecast that Nvidia could reach a $5 trillion market value, after only recently having achieved a $4 trillion capitalization for the first time. NVDA YTD mountain Nvidia stock in 2025. Shares have advanced almost 28% so far in 2025, while the S & P 500 has risen less than 7%, according to FactSet data. Here's the latest analyst commentary and forecasts on Nvidia. Melius Research raises price target to $235 per share Analyst Ben Reitzes said that Nvidia could be headed for a $5 trillion market cap, and said "getting back in China after a mid-April ban is a huge tailwind" for the company. Reitzes' forecast calls for more than 43% upside from Monday's $164.07 close. "The news not only means that Nvidia's revenues accelerate even more sequentially in the back half of FY26, but it also adds a huge tailwind to growth in F1H27 - making FY27 a much bigger growth year than the previous consensus of just 26%," the analyst said. "We wouldn't be surprised if all or most of the $8B run rate/quarter in lost China sales came back completely by F4Q26 given pent up demand and boosted FY27 overall revenue growth to 38% y/y after 59% growth in FY26." Oppenheimer hikes price target to $200 per share Analyst Rick Schafer's forecast implies about 22% upside for Nvidia stock. "We see several structural tailwinds driving sustained outsized top-line growth including generative AI, DC/AI accelerators and autonomous vehicles. We believe these factors justify its valuation," the analyst said. Bernstein reiterates outperform rating and $185 per share price target Analyst Stacy Rasgon's outlook implies nearly 13% upside for Nvidia stock. Rasgon said that while Nvidia's second-quarter results likely won't see the company ship enough chips to catch up on lost revenue, the chipmaker is likely to see benefits in the second half that ends next January. "Beyond the revenue/earnings recovery, we are glad to see NVDA able to compete at least somewhat in China as it limits potential for more structural risks," Rasgon wrote. "We always saw the H20 ban as unnecessary and, frankly, somewhat nonsensical as performance of the part is already low, and well below already-available Chinese alternatives; a ban would simply hand the AI market in China over to Huawei as well as encourage the growth of local ecosystem alternatives (with a risk that they filter out of China over time)." "[E]very ~$10B of recovered NVDA China revenues would drive roughly 25 cents in additional EPS," the analyst added. "Therefore, capturing an incremental $15-$20B in China revenue through the rest of the fiscal year would provide 40-50 cents in EPS upside for FY2026, all else being equal (10%+ or so accretion on current consensus?)." Evercore ISI reiterates Nvidia as top pick The firm's $190 per share price target calls for about 16% upside. Analyst Mark Lipacis forecast that Nvidia could see as much as $10 billion in near-term revenue if all the restrictions on H20 chip sales to China are removed. "Assuming 70-75% [gross margins] on $2.75bn of inventories would imply about $10bn in revenues anticipated from those written down inventories on hand, but since the product was written down, that would suggest much higher gross margins on that $10bn of revenues," the analyst said. Citigroup cautiously optimistic Analyst Atif Malik's also has a $190 per share price target on Nvidia. "We believe investors should take a 'wait and see' approach before adding China contribution back to their models," the analyst said. "That said, China is an important market for Nvidia in gaming and networking and it helps to sell some compute chips."

Nvidia stock investors just got great news from the Trump Administration

In an interview with USA TODAY, Jensen Huang, CEO of the world's most valuable company NVIDIA, discussed President Trump's tariffs and manufacturing. Nvidia (NASDAQ: NVDA) has been a cornerstone of the artificial intelligence (AI) boom. The stock has advanced 1,070% since January 2023 as the company has reported tremendous financial results, driven by strong demand for its graphics processing units (GPUs) and other data center infrastructure. Nevertheless, export restrictions imposed by the U.S. government have cost the company billions of dollars in sales. Fortunately, Nvidia shareholders recently got great news from the Trump administration: Applications to resume selling its H20 GPUs in China will be approved by the Commerce Department. Here's what investors should know. How semiconductor export restrictions have impacted Nvidia under the Biden and Trump administrations China has historically been a major market for Nvidia. It accounted for 26% of revenue in the fiscal year that ended in January 2022. But export restrictions dragged that figure down to 22% in fiscal 2023, 17% in fiscal 2024 and 13% in fiscal 2025. Meanwhile, CEO Jensen Huang estimates Nvidia's market share in artificial intelligence (AI) chips in China has fallen from 95% to about 50%. The timeline below briefly explains how U.S. policy has evolved over time. * September 2022: The Biden administration told Nvidia to stop exporting A100 GPUs and more powerful H100 GPUs to China. The company estimated it would lose about $400 million in quarterly revenue. Nvidia responded by creating a compliant version of its Hopper GPU called the H800. * October 2023: The Biden administration told Nvidia to stop exporting H800 GPUs to China. The company was forced to cancel billions of dollars in orders. Nvidia again responded by creating an export-compliant version of its Hopper GPU called the H20. * April 2025: The Trump administration told Nvidia to stop exporting H20 GPUs to China. The company took a $4.5 billion charge due to inventory that could not be repurposed and estimated it would lose $8 billion in revenue in the second quarter. On the first-quarter earnings call, Nvidia CFO Colette Kress said, "Losing access to the China AI accelerator market, which we believe will grow to nearly $50 billion, would have a material adverse impact on our business going forward and benefit our foreign competitors worldwide." CEO Jensen Huang has called the export restrictions a failure. He said in May: The question is not whether China will have AI. It already does. The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position. The Trump administration will grant licenses allowing Nvidia to sell H20 GPUs in China On Monday, July 14, Nvidia said it has filed applications to resume selling H20 GPUs in China and has received assurances from the U.S. government that licenses will be granted. The news came days after CEO Jensen Huang met with President Trump, and the company plans to begin delivering compliant AI accelerator chips to China soon. Additionally, the Trump administration revoked the Biden-era AI Diffusion Rule earlier this year, which would have limited Nvidia's ability to sell its most advanced AI chips in dozens of countries that have historically been U.S. allies, including Saudi Arabia, the United Arab Emirates (UAE), Singapore and Israel. The Commerce Department said the AI Diffusion Rule, which was announced during the final days of the Biden administration, would have "stifled American innovation and saddled companies with burdensome new regulatory requirements." Additionally, it would have "undermined U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status." Nvidia has already capitalized on the rescission of the AI Diffusion Rule as more countries lean into sovereign AI -- meaning wholly owned data center infrastructure not subject to control by another nation. Earlier this year, the company announced partnerships that will bring its chips and networking equipment to Saudi Arabia and the UAE. Wall Street analysts are likely to increase earnings estimates for Nvidia Ultimately, the Trump administration's decision to permit the sale of H20 GPUs into China, coupled with its rescission of the AI Diffusion Rule, means Nvidia now has a larger total addressable market. In turn, Wall Street analysts are likely to raise earnings estimates, and upward revisions tend to correlate with share-price appreciation. The Wall Street consensus currently says Nvidia's earnings will grow at 41% annually through the fiscal year ending in January 2027. That makes the current valuation of 54 times earnings look tolerable. However, upward revisions to earnings estimates would make the stock even more attractive. Investors interested in adding shares to their portfolios should consider buying Nvidia stock now. Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY. Should you invest $1,000 in Nvidia right now? Offer from the Motley Fool: Before you buy stock in Nvidia, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $680,559!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,005,670!* Now, it's worth noting Stock Advisor's total average return is 1,053% -- a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.

Nvidia sparks buzz ahead of July 16 -- will CEO Jensen Huang unveil the next big AI move?

Nvidia's big China comeback: H20 AI chip sales approved, stock jumps as CEO Jensen Huang teases major AI reveal on July 16- The story around Nvidia is heating up fast as we head into July 16. With the spotlight on CEO Jensen Huang, the tech world is waiting to see what's coming next in the AI race. Nvidia has already made headlines this week by scoring U.S. approval to resume sales of its H20 AI chips to China, and now there's growing talk that Huang might use his Beijing appearance to reveal a major move in AI. This event isn't just another industry update. It could shape how Nvidia plays in both the global AI chip market and China's booming tech sector. So what exactly is going on? Let's break it down. The key reason behind the rising excitement is Nvidia's decision to hold a media briefing in Beijing on July 16, as confirmed by a company spokesperson. This will be Huang's second visit to China in 2024, signaling how serious Nvidia is about reconnecting with a region that once brought in around $17 billion in annual revenue. Now that Nvidia is cleared to ship its advanced H20 chips to Chinese companies again, industry watchers believe Huang could use this opportunity to unveil a new AI strategy or even launch new chip models designed specifically for China, where U.S. tech restrictions have made things tricky in recent months. There's speculation that Nvidia may unveil a new China-approved chip, possibly a version of the Blackwell RTX Pro 6000, tailored to meet U.S. export restrictions and support Chinese AI demand. Huang's visit is being watched closely in Washington. Two U.S. senators have warned him not to work with blacklisted Chinese companies, keeping Nvidia in a tight spot between U.S. rules and China sales. Despite pressure, Nvidia is betting big on its CUDA platform and local demand, as Chinese companies are lining up to buy the newly cleared H20 chips -- especially before new U.S. restrictions hit again. Until recently, Nvidia's business in China was under pressure due to U.S. government restrictions on exporting its high-end chips like the A100 and H100, which are widely used for training powerful AI models. To stay in the game, Nvidia developed new chips including the H20, L20, and L2, which are built to meet the U.S. export rules while still giving Chinese companies access to strong computing power. Now that the H20 chip has received U.S. approval, Nvidia is set to resume shipments. That's a huge win, considering the company reportedly lost about $4.5 billion in sales because of the previous restrictions. Major Chinese tech players like ByteDance, Alibaba, and Tencent are already lining up to buy. Nvidia's stock surged in response to the news. On July 15, pre-market trading showed a 4.5% jump, with shares hitting around $171.40. This also helped lift the Nasdaq-100 index by 0.6%, showing how much influence Nvidia holds over the broader tech market. Investors are clearly optimistic. The approval to restart chip exports, combined with the anticipation of a big announcement from Huang, has created strong momentum for the stock. Opinions are mixed -- but the bull case is loud and clear. Many analysts believe Nvidia is still in the early innings of a long AI boom: While the company hasn't confirmed any specific product launches, industry experts think Huang might announce: Given the sensitive environment around U.S.-China tech policies, any new announcement will likely be designed to show Nvidia's ability to adapt without crossing any red lines. With the stock already testing highs again, investors are watching closely for what comes out of Beijing. If Huang delivers a bold vision, or if new product details come out, Nvidia could break above $180 in the short term, with some models pointing toward $205-$210 in the next few months. However, there are still risks. If global regulations tighten or if competitors like Huawei continue to gain ground in China, Nvidia could face new headwinds. Q1: Why is Nvidia's July 16 event important for AI? It may reveal new AI chips or plans for China's market. Q2: Has Nvidia resumed H20 chip sales to China? Yes, U.S. cleared shipments and sales are restarting.

Nvidia Is 'On A March To $5 Trillion' Market Capitalization, Says Dan Ives As He Predicts Bullish Environment For Tech And Crypto: 'Very Strong Second Half'

Wedbush analyst Daniel Ives delivered an optimistic outlook for Nvidia Corp. NVDA and the broader tech and crypto markets, predicting a $5 trillion market capitalization for the tech giant led by Jensen Huang. Check out the current price of NVDA stock here. What Happened: In a podcast "Mottek On Money," hosted by Frank Mottek, Ives highlighted Nvidia's recent surge past $170 per share, driven by a pivotal U.S. decision to allow its H20 AI chips into China, calling it a "watershed decision" that could add $30 to $40 billion annually to the company's revenue. Ives boldly predicted, "I think it's on a march to $5 trillion," underscoring Nvidia's potential to become the world's most valuable company, surpassing its current $4.17 trillion market cap. This bullish stance comes as the Nasdaq also hit a record high, fueled by an AI revolution entering its "software phase, the consumer phase," according to Ives. He envisions a tech bull market, forecasting the Nasdaq could reach 22,000 to 25,000 by year-end. Further, Ives celebrated Nvidia CEO Huang's "Beltway political battle" win with the China deal and Donald Trump's $90 billion AI investment push, calling it a "golden age" where the U.S. leads China in tech. He dismissed China's AI efforts, like DeepSeek, as reliant on Nvidia GPUs, reinforcing his belief that "we're still in the second inning" of the AI boom. See Also: Nvidia's China Revenue 'Is Far From Gone', But It Outmaneuvered US For Rare Earth In Exchange For AI Chips, Says Craig Shapiro Why It Matters: The discussion extended to cryptocurrency, with Ives noting Bitcoin's BTC/USD climb above $123,000 and Ethereum's ETH/USD resurgence past $3,000. He attributed this to a "regulatory environment" with the Trump-led administration and growing investor appetite, predicting, "I think we're going to have a very strong second half of the year" for both Bitcoin and Ethereum. Ives suggested tariffs would likely be delayed or scaled down, creating a "bullish for tech, bullish for crypto" environment. Price Action: As of the publication of this article, Bitcoin was trading at $119,226.33 per coin, down from its all-time high of $123,091.61. Whereas Ethereum was at $3,155.72, 35.38% below its record of $$4,891.70. Nvidia was 0.57% lower in premarket on Wednesday. the stock has advanced 23.42% on a year-to-date basis and 35.09% over a year. Benzinga Edge Stock Rankings shows that NVDA had a stronger price trend over the short, medium, and long term. Its momentum ranking was solid, whereas its value ranking was poor; the details of all the metrics are available here. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, were lower in premarket on Wednesday. The SPY was down 0.051% at $621.82, while the QQQ declined 0.22% to $555.52, according to Benzinga Pro data. Read Next: Stanley Druckenmiller's Duquesne Dumps Palantir, Bets Big On This Dividend Play Which Has Surged Nearly 50% In 2025 Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock $BTCBitcoin$118878.840.93%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum94.97Price TrendShortMediumLongOverview$ETHEthereum$3155.600.52%Market News and Data brought to you by Benzinga APIs

Why Nvidia's China Comeback Could Propel Its Stock To New Heights - NVIDIA (NASDAQ:NVDA)

Needham analyst N. Quinn Bolton maintained a Buy rating on Nvidia NVDA and raised the price forecast from $160 to $200 on Wednesday. Nvidia is preparing to resume shipments of its H20 GPUs to China after the U.S. government approved export license filings, according to CEO Jensen Huang, Bolton noted. The green light comes after April's export controls blocked $2.5 billion in H20 shipments during fiscal first-quarter 2026 and halted another $8 billion in scheduled deliveries for fiscal second-quarter 2026, the analyst said. Also Read: Nvidia Outpaces Market With AI-Powered Growth, Nears Record Highs Nvidia had already generated $4.6 billion in H20 revenue before the license requirement took effect and recorded a $4.5 billion charge for H20 inventory and purchase obligations in first-quarter, he told. Bolton responded by sharply raising his financial forecasts. He now conservatively projects $3 billion in H20 shipments per quarter over the coming quarters and estimates that previously written-down H20 inventory could generate nearly 100% gross margin when sold. Bolton also sees additional upside from Nvidia's expected launch of Blackwell GPU variants tailored for the Chinese market -- B30 and B40/RTX 6000D -- with performance estimated at ~75% of the H20. These variants, priced between $6,500 and $8,000 (versus $10,000-$12,000 for H20), are reportedly in high demand, with over $1 billion in orders already placed, he noted. Volume shipments could begin as early as August or September, he said. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Reflecting these developments, Bolton increased his fiscal third-quarter and fourth-quarter 2026 revenue estimates by $4 billion each, fiscal 2027 revenue estimate to $265.0 billion and EPS to $6.20 (from $250.0 billion and $5.80), fiscal 2026 revenue to $202.6 billion and EPS to $4.42 (from $194.6 billion and $4.17). Bolton introduced fiscal 2028 estimates with $315.0 billion in revenue and EPS of $7.25, including $20 billion from China data center GPU sales Bolton noted Nvidia is well-positioned to recapture lost sales and gain further traction in China, even under export restrictions, thanks to rapid product adaptation and sustained demand from Chinese tech firms. NVDA Price Action: NVDA stock is trading lower by 0.40% to $170.02 at last check on Wednesday. Read Next: Cisco Is Quietly Beating The AI Hype -- Should Investors Pay Closer Attention? Photo via Shutterstock NVDANVIDIA Corp$170.980.16%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum86.52Growth98.62QualityN/AValue6.27Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Nvidia Now Bigger Than China And Japan In This Global Stock Index: $4 Trillion Chip Giant's Contribution Crushes Entire Nations -- 'Historic Is An Understatement' - Apple (NASDAQ:AAPL), Advanced Micro Devices (NASDAQ:AMD)

Chip giant Nvidia Corp. NVDA has reached a new milestone in the global equity markets, now standing as the single-largest contributor to the MSCI All Country World Index (ACWI). Check out the current price of NVDA stock here. What Happened: On Wednesday, in a post on X, The Kobeissi Letter highlighted Nvidia's impressive standing among global equity markets, with a weightage of 4.73%, which now exceeds the weight of Japan's entire stock market, the third largest in the world, at 4.65%. The MSCI ACWI tracks large and mid-cap stocks across 23 developed and 24 emerging markets, representing approximately 85% of global equity market capitalization. Nvidia, whose valuation recently touched $4 trillion, now stands as the single-largest contributor to this benchmark. See Also: Nvidia's China Revenue 'Is Far From Gone', But It Outmaneuvered US For Rare Earth In Exchange For AI Chips, Says Craig Shapiro "Nvidia's weight ALONE is now larger than Japan's 4.65% share," the post says, calling this "incredible," while listing other countries that now trail the chipmaker, with the U.K., China and Canada accounting for "3.28%, 2.97%, and 2.87%, respectively." It further notes that the company is now tied with the combined weight of France and Germany, two of Europe's largest economies. The post concludes by saying that the term "Historic is an understatement" for the stock and its performance over the past couple of years. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started Why It Matters: Last week, Nvidia became the first company in history to be valued at more than $4 trillion, within just two years of joining the $1 trillion club. The stock is up 1,580% over the past five years. With President Donald Trump greenlighting shipments of Nvidia's H20 AI chips to China after a months-long ban, leading the stock to surge higher, as it stands to regain its lost $15 billion in China sales. Recently, Benzinga readers predicted that the company will be the first to reach the $5 trillion mark as well, beating both Microsoft Corp. MSFT and Apple Inc. AAPL. Price Action: Nvidia shares were up 0.39% on Wednesday, trading at $171.37, and are down 0.09% after hours. The stock scores high on Momentum and Growth according to Benzinga's Edge Stock Rankings, and has a favorable price trend in the short, medium and long terms. Click here to see how it compares with competitors Broadcom Inc. AVGO and Advanced Micro Devices Inc. AMD. Photo: Hepha1st0s On Shutterstock.com Read More: Nvidia's Jensen Huang: China Doesn't Need US Chips AAPLApple Inc$210.040.44%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum27.06Growth32.37Quality76.23Value9.16Price TrendShortMediumLongOverviewAMDAdvanced Micro Devices Inc$159.452.47%AVGOBroadcom Inc$280.19-0.27%MSFTMicrosoft Corp$504.75-0.21%NVDANVIDIA Corp$171.210.30%Market News and Data brought to you by Benzinga APIs

Why Nvidia Still Looks Like A Bargain At A $4 Trillion Market Cap - NVIDIA (NASDAQ:NVDA)

There's little doubt that Nvidia NVDA is the stock of the decade so far, and as it hit a $4 trillion valuation, there remains plenty of optimism for further sustained growth. Nvidia was up 17.65% in the first half of 2025 amid challenging economic conditions for many Wall Street tech firms amid President Trump's bold strategy on reciprocal tariffs. However, the chipmaker has been buoyed by the gains made by its products in training leading artificial intelligence models, which has fueled global demand. This has been a recurring theme for Nvidia amid the ongoing AI boom. Between the beginning of 2020 and the end of H1 2025, NVDA has rallied an astonishing 2,500% and is now the world's largest stock by market capitalization. With Nvidia becoming the world's first company with a $4 trillion valuation, it's impressive that some of Wall Street's leading analysts are expecting further growth in the not-too-distant future. According to veteran Wall Street fund manager Chris Versace, the stock remains in a strong position to continue growing. Recently, Versace raised its price target for NVDA from $175 to $185. NVDA at $185 would mean an astronomical market cap of $4.6 trillion, but is further growth really inevitable for a company that's already rallied to seismic proportions off the back of the AI boom? World-Leading Innovation Nvidia's strength stems from its innovation pipeline, which has helped the chip giant to become an essential component of the global adoption of artificial intelligence infrastructure. With UNCTAD suggesting that the global AI market will reach a value of $4.8 trillion by 2033, it's clear that the emergence of artificial intelligence and GenAI systems will be a driving force for future growth among Nvidia, as well as other chip makers. Crucially, the global server market rallied to almost $100 billion in Q1 2025 as more companies build their AI infrastructure, with Arm-powered server shipments rising 70%. Nvidia's market dominance in this field has seen its GB200 NVL72 rack-scale solution, based on its Grace Blackwell platform, take the lion's share of orders among firms. In total, server purchases grew to $95.2 billion in the first quarter of the year, reflecting a 134.1% rise over the same period in 2024. "Nvidia's strong position as a leading chip maker as artificial intelligence adoption continues to accelerate has been underlined in its first-quarter performance, in which the company reported revenues of $26 billion, which represents growth of 18% from Q4 2024 and 262% from the same period last year," explained Steve Frauzel, head of market insights at Just2Trade, a global brokerage brand. "At the heart of Nvidia's future prospects is its game-changing Blackwell supercomputer that's already attracting interest among nations like the United Arab Emirates to support its development of data centres." Trade Uncertainty Lingers Despite high demand, some uncertainty may impact the performance of Nvidia in 2025 as the Trump administration's reciprocal tariffs continue to impact the long-term prospects of companies with an international focus. CEO Jensen Huang suggested that being blocked from Chinese markets would be a 'tremendous loss' for Nvidia, and the chip maker has already written off $5.5 billion after the Trump administration said the company would need a license to sell its H20 chips overseas. To make matters more challenging, there appear to be no guarantees that Nvidia will be granted the license. This suggests that Nvidia's prospects for H2 2025 and beyond may be influenced by the outcome of trade negotiations between the United States and China, in particular. While a return of the alarming 145% tariffs we briefly saw in April remains unlikely, any escalation in trade tensions could hinder Nvidia's growth prospects. Insider Cash Outs Offer an Opportunity Nvidia has been subject to growing insider sell-offs in recent months, with over $1 billion worth of stock sold in the past year and more than 50% of the cash-outs arriving throughout June. While insider cash-outs can be a bearish signal for investors, An FT report noted that all sales created by Huang were part of a trading plan agreed upon in March, which was triggered in June at a prearranged price. At an estimated price-to-earnings (P/E) of 50.0, these sell-offs appear to be profit-taking as opposed to something more sinister for investors and could present a timely window of opportunity for investors to purchase the stock at a discounted price. With both artificial intelligence adoption and the demand for data centers only continuing to gather momentum, it's clear that there's likely to be plenty more room to run for Nvidia over the months ahead. Although some volatility could emerge as a result of Trump's strategy on tariffs, Nvidia's strong market position could see the company consolidate its position as the world's most valuable stock for some time. Disclosure: On the date of publication, Dmytro Spilka did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer. Dmytro Spilka does not intend to make a trade in any of the securities mentioned above in the next 72 hours. NVDANVIDIA Corp$172.520.67%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum87.78Growth98.62QualityN/AValue6.31Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Will Nvidia Announce Something Big on July 16? | The Motley Fool

Nvidia (NVDA -0.46%) has made headlines over the past few years as it's reinforced its position as an artificial intelligence (AI) chip leader. The company has spoken of "insane" demand for its latest architecture and chip, has delivered record levels of revenue and high profitability, and has shown that it can be part of every stage of AI growth. All of this has helped the shares to skyrocket, advancing more than 980% over the past three years. But Nvidia has encountered one major hurdle along this path, and that's operating in the Chinese market. A few years ago, the U.S. launched export controls, preventing Nvidia and others from shipping their top-performing chips to that country. Nvidia responded by designing a chip that met U.S. guidelines, but this spring the U.S. informed the company that it could no longer export that chip without a license -- the U.S. hasn't yet granted such a license to chip companies. That move officially closed the door to the Chinese market, prompting Nvidia to say it no longer would include China in its earnings guidance. Since, CEO Jensen Huang has spoken openly about how export controls will be negative for U.S. chip designers as well as the AI industry in the U.S. Now, Huang has something planned for July 16 that Nvidia investors should watch. First, though, a quick summary of Nvidia's path so far and its position in China. As mentioned, Nvidia is the world's AI chip leader, selling its graphics processing units (GPUs) to everyone from start-ups to tech giants. The company also offers a wide range of AI products and services, and this whole package has helped generate double- and triple-digit revenue growth -- Nvidia reported a staggering level of revenue in the latest full year at $130 billion. Nvidia generates most of its revenue in the U.S., but China also is an important market. In the recent fiscal year, that country represented 13% of the company's total sales. This is as Nvidia sold its H20 chip, specifically designed to meet U.S. export guidelines for the Chinese market. But, as mentioned, Nvidia received a letter from the government this spring saying it could no longer continue shipping H20s as usual. This resulted in Nvidia taking a $4.5 billion charge in the quarter for H20s that it could no longer sell, and even worse, it locked this chip giant out of the China market. Huang made a trip to China in April and hasn't given up on an eventual return to the market. "We are exploring limited ways to compete," Huang said during Nvidia's recent earnings call. Now, let's consider what's happening on July 16. Huang plans to hold a press conference in Beijing, Reuters reported, citing an Nvidia official. The wire service also reported that two senators sent Huang a letter asking him not to meet with companies working with Chinese military or intelligence as well as companies on the U.S. export restriction list. Should investors expect a big announcement from Huang during the media briefing? The Chinese export situation is complex, but Huang has shown himself to be resourceful in the past. One example is Nvidia's rapid development of the H20 to suit earlier guidelines. Another example of resourcefulness happened after President Donald Trump announced his import tariff plan this spring. Nvidia then said it would invest in U.S. manufacturing facilities to produce the first AI supercomputers in the U.S. Of course, it's impossible to predict what Huang will say on July 16 with 100% accuracy, but I wouldn't be surprised if this resourceful CEO announces some progress on Nvidia's quest to return to the Chinese market. And if he does, this clearly could be big news for Nvidia -- and the stock could soar. What does all of this mean for investors over the long term? The ability to sell chips once again to China would offer Nvidia a revenue boost, and that's positive. But it's important to keep in mind that even if Nvidia doesn't announce something big this week and it remains excluded from the Chinese market, this company still generates extremely strong growth -- and is well positioned to continue along that path with or without China. That's why, whether Nvidia is able to return to that market or not, this AI stock remains a fantastic one to hold on to over time.

Nvidia Is Surging to an All-Time High Today -- Is the Stock a Buy Right Now? | The Motley Fool

Nvidia (NVDA 4.40%) stock is jumping in Tuesday's trading following some big news for the company. The artificial intelligence (AI) leader's share price was up 3.5% as of 10:15 a.m. ET and had been up as much as 5% at the start of the session. Nvidia's valuation is bounding to a new record high today following announcements that the Trump administration will allow the company to ship its H20 processors to China. The company also said that it has designed a separate, less powerful processor that meets all current regulatory requirements for sale in the country. Being able to sell its processors in the Chinese market is a significant win for Nvidia, and CEO Jensen Huang's ability to secure the necessary export license after meeting with President Trump underscores just how influential the tech leader and his company are right now. With today's gains, the company now has a market capitalization of roughly $4.14 trillion and continues to stand as the world's most valuable business. Nvidia has undisputed leadership in the AI processor market, and the company looks poised to continue benefiting from long-term demand tailwinds connected to the rise of artificial intelligence. With the Trump administration giving the go-ahead for the the AI leader's H20 processors and other hardware to be sold into the Chinese market, there are indications that one of the biggest risk factors facing the company may be lessening. Artificial intelligence is central to the geopolitical tensions and competition between the U.S. and China, and Nvidia's advanced processors occupy a central role in the battle for AI supremacy. While geopolitical dynamics between the two countries continue to be a major risk factor for Nvidia, the same is true for most stocks on the market -- albeit to a lesser extent in some cases. With signs that access to Nvidia's processors is being used as a bargaining chip as part of larger trade negotiations between the two countries, conditions for Nvidia stock appear to be improving on multiple fronts. The stock still comes with significant risk, but its leadership in the AI processor market remains undeniable, and some geopolitical and macroeconomic conditions appear to be aligning to support a continued rally.

Nvidia's Stock Looks Set to Soar on Resumption of H20 AI Chip Sales to China | The Motley Fool

Nvidia stock's surge looks poised to accelerate because investors' biggest concern about the company -- losing the Chinese data center AI chip market -- is now a non-issue. On Monday night, Nvidia (NVDA 4.12%) announced that it will resume sales of its H20 artificial intelligence (AI) chip to China, which it had halted in April because of new U.S. government export controls, citing national security concerns. Nvidia's announcement came via an email just after 9:30 p.m. ET to investors who subscribe to the company's news and other releases with a link to a blog post. This is great news for investors and should help propel Nvidia stock higher. Nvidia's email announcement credited CEO Jensen Huang for the H20 news, stating that he "has been promoting AI this month in Washington, DC, and China -- emphasizing the benefits that AI will bring to business and society worldwide." But here's the core message for investors contained in Nvidia's email announcement: "NVIDIA is filing applications to sell the NVIDIA H20 GPU [graphics processing unit] again. The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon." Note the word "soon" -- Nvidia hopes to start deliveries "soon." Nvidia's fiscal second quarter ends in late July. So it seems likely that this H20 news will start making a major impact in the fiscal third quarter. More on potential financial implications follows. As I wrote at the time: "Nvidia stock fell 6.9% on Wednesday [April 16], following the tech giant's Tuesday night disclosure via a filing with the U.S. Securities and Exchange Commission (SEC) that it plans to take charges of up to $5.5 billion on its fiscal first-quarter results. The charges stem from the U.S. government enacting restrictions on the export of its H20 chip to China and select other countries." As it ended up, Nvidia took charges (for H20 products in inventory and purchase commitments) of less than the maximum that it had originally estimated. In late May, when it reported its fiscal first-quarter results, the total H20-associated charges were $4.5 billion. Yes, that's still huge. First, let's consider how the halt in H20 sales in mid-April affected Nvidia's results for its fiscal Q1 (ended on April 27). Its results were considerably hurt by this event. In addition to taking the $4.5 billion in charges, the company was unable to ship $2.5 billion in H20 chips that it had already produced. In other words, it "lost" sales of $2.5 billion. However, it was able to book H20 sales of $4.6 billion in the quarter prior to the implementation of the new export controls. Nvidia's Q1 total revenue was $44.1 billion. So, its $4.6 billion in H20 sales to China accounted for 10.4% of its total revenue. And had the company been able to ship the additional $2.5 billion in H20 chips, its H20 sales would have been $7.1 billion and 16.1% of its total revenue. This is a big chunk of total revenue and clearly shows the significance of the Chinese market. The good news is that investors can probably expect Nvidia's quarterly H20 sales to resume in the general ballpark of where they left off, if not higher. Monday night's news is fantastic for the stock. Nvidia has been firing on all cylinders, but investor concern over the company losing its Chinese market for its data center AI chips has likely kept the stock from rising as much as it otherwise would.

Why Nvidia Stock Rallied on Tuesday

The artificial intelligence (AI) chipmaker got good news that inspired Wall Street. Shares of Nvidia (NVDA 4.37%) were off to the races on Tuesday, climbing as much as 5%. As of 10:27 a.m. ET, the stock was still up 4.6%. The catalyst that sent the artificial intelligence (AI) chipmaker higher was news that the company could regain access to one of its most important markets, which sent Wall Street analysts scrambling to update their price targets. Chips ahoy In a blog post published after the market close on Monday, Nvidia announced that it would resume sales of its H20 chips to China. The processors were designed to meet the stringent export requirements for Chinese customers. U.S. officials had voiced concerns that the AI-centric processors could be used by the military in China, prompting the creation of these specially designed chips for that market. The Trump administration had temporarily banned the sale of the previously approved chips, but the company noted, "The U.S. government has assured Nvidia that licenses [to sell the chips in China] will be granted, and Nvidia hopes to start deliveries soon." In response to the announcement, Wall Street analysts were working feverishly to update their models, resulting in numerous price target increases. Melius Research was among the most bullish, maintaining its buy rating and increasing its price target to $235, up from $205. That represents potential upside of 43% compared to Monday's closing price. The analysts cited a more positive outlook on potential sales and the company's strategic growth initiatives. Time to buy? Investors were worried that strict export controls on the sale of graphics processing units (GPUs) to companies in China would hurt Nvidia's results, and those concerns were justified. In its fiscal first quarter (ended April 27), the company took a $4.5 billion write-off related to its H20 chips. The company had already made $4.6 billion in sales, suggesting there was roughly $9 billion at stake during the quarter. That overhang is now lifted. And at just 30 times next year's expected earnings, the stock is attractively priced, which is why Nvidia is a buy.

Jensen Huang Just Delivered Massive News for Nvidia Investors

When Nvidia (NVDA 4.39%) released its fiscal 2026 first-quarter results (for the three months ended April 27) a couple of months ago, the company had bad news in store for investors as it was losing business in a key market thanks to export restrictions. Specifically, Nvidia pointed out in its previous earnings report that it bore a multibillion-dollar charge because of its inability to ship its H20 artificial intelligence (AI) chips to China. Its revenue during the quarter took a hit, while the guidance could have been much better if there were no restrictions on the sales of its chips to Chinese customers. But now, it looks like Nvidia is set to resume its sales in China. Let's take a closer look at this latest development that could give its business a big boost. Jensen Huang says that Nvidia is set to start shipments of its H20 chips to China Nvidia was informed by the U.S. government in April that it needs a license to export its China-specific H20 chip into that market. The company took a $4.5 billion charge on account of the excess inventory of the unsold H20 chips that it was left with. Nvidia also lost $2.5 billion in revenue because of this restriction during the quarter. Even worse, the company said that it will lose $8 billion in H20 revenue in the ongoing quarter thanks to the restrictions. However, a blog published by Nvidia on July 14 states that CEO Jensen Huang met with President Donald Trump and other policymakers, giving an update that the company "is filing applications to sell the NVIDIA H20 GPU again." More importantly, the blog points out that the U.S. government assured Nvidia that licenses will be granted and the company hopes for deliveries to begin soon. Nvidia shipped $4.6 billion worth of H20 processors to China in fiscal Q1 before the export restrictions kicked in. Including the lost sales during the quarter, Nvidia's Chinese revenue would have been just over $7 billion. And when we consider the $8 billion revenue that the company was expecting from this market in fiscal Q2, Nvidia's revenue from that market would have hit $15 billion in the first half of the current fiscal year. The Chinese business, therefore, was on track to generate $30 billion in annual revenue for the company this year before it was hamstrung by the export controls. Analysts are expecting $200 billion in revenue from Nvidia in the current fiscal year. That figure could have been significantly higher if the company were allowed to uninterruptedly sell its H20 processors into the Chinese market. However, Nvidia was caught in the crosshairs of the tariff-fueled trade war between the U.S. and China. The good part is that both countries show\ signs of easing restrictions on exports of key products, and it looks like Nvidia has benefited from the same. As such, it won't be surprising to see the chipmaker finish the current fiscal year in a stronger-than-expected position. The return of the lost business could be a tailwind for the stock in the second half of 2025 We already saw how much revenue Nvidia could have minted from China in the current fiscal year. Now that the company is set to receive licenses to export its chips, there is a good chance that it could get back that lost revenue. Nvidia is going to be in a position to fulfill the $8 billion worth of orders that it had lined up for fiscal Q2, along with the $2.5 billion worth of shipments that it was unable to fulfill in the previous quarter. This could help Nvidia generate more revenue than what Wall Street is anticipating in the current fiscal year. Assuming that Nvidia manages to sustain the run rate of its H20 business in China in the second half of the fiscal year, it could generate $15 billion in revenue from that market. Analysts at equity research firm Bernstein estimate that Nvidia has the potential to generate incremental revenue of $15 billion to $20 billion in the current fiscal year once it gets the H20 export licenses. What's more, the company could generate an additional $0.40 to $0.50 per share in earnings based on the incremental revenue estimate. In the end, it can be concluded that Nvidia could deliver stronger-than-expected growth in fiscal 2026, which it can sustain in the long run as well thanks to the opportunities it is witnessing in other countries. Investors, therefore, have another reason to buy Nvidia stock right now as a potential acceleration in its revenue and earnings growth following this latest development could lead to more upside.

Stock Market Today: Nvidia Climbs on China GPU Export Resumption | The Motley Fool

Nvidia (NVDA 4.08%) shares surged 4% to close at $170.70 on Tuesday, outpacing broader market indices as investors responded positively to news about graphics processing unit (GPU) exports to China resuming. The chipmaker received assurances from the Trump administration that it can once again export its H20 GPU to the Chinese market. While Nvidia rallied, major indices showed mixed performance. The S&P 500 fell slightly, dropping 0.4%, while the Nasdaq Composite remained relatively flat with its 0.18% gain, highlighting Nvidia's strong individual performance against market headwinds. Among competitors, Advanced Micro Devices (AMD 6.55%) showed even stronger performance, jumping 6.4% to $155.61, while Intel (INTC -1.59%) declined 1.63% to $22.92, highlighting the diverging fortunes within the semiconductor sector. Nvidia's trading volume reached approximately 229 million shares, below its 200-day average of approximately 253 million shares, according to Barchart data. Technically, the stock has established positive momentum by reclaiming its 200-day moving average of around $131.40, with the shares now trading nearly 30% above this key technical indicator. The company's renewed access to the crucial Chinese market, combined with ongoing sector rotation into artificial intelligence (AI) infrastructure investments, appears to be solidifying Nvidia's position as the premier semiconductor manufacturer in the rapidly expanding AI space.

Nvidia Stock Investors Just Got Great News From the Trump Administration

Nvidia (NVDA 4.08%) has been a cornerstone of the artificial intelligence (AI) boom. The stock has advanced 1,070% since January 2023 as the company has reported tremendous financial results, driven by strong demand for its graphics processing units (GPUs) and other data center infrastructure. Nevertheless, export restrictions imposed by the U.S. government have cost the company billions of dollars in sales. Fortunately, Nvidia shareholders recently got great news from the Trump administration: Applications to resume selling its H20 GPUs in China will be approved by the Commerce Department. Here's what investors should know. How semiconductor export restrictions have impacted Nvidia under the Biden and Trump administrations China has historically been a major market for Nvidia. It accounted for 26% of revenue in the fiscal year that ended in January 2022. But export restrictions dragged that figure down to 22% in fiscal 2023, 17% in fiscal 2024, and 13% in fiscal 2025. Meanwhile, CEO Jensen Huang estimates Nvidia's market share in artificial intelligence (AI) chips in China has fallen from 95% to about 50%. The timeline below briefly explains how U.S. policy has evolved over time. * September 2022: The Biden administration told Nvidia to stop exporting A100 GPUs and more powerful H100 GPUs to China. The company estimated it would lose about $400 million in quarterly revenue. Nvidia responded by creating a compliant version of its Hopper GPU called the H800. * October 2023: The Biden administration told Nvidia to stop exporting H800 GPUs to China. The company was forced to cancel billions of dollars in orders. Nvidia again responded by creating an export-compliant version of its Hopper GPU called the H20. * April 2025: The Trump administration told Nvidia to stop exporting H20 GPUs to China. The company took a $4.5 billion charge due to inventory that could not be repurposed and estimated it would lose $8 billion in revenue in the second quarter. On the first-quarter earnings call, Nvidia CFO Colette Kress said, "Losing access to the China AI accelerator market, which we believe will grow to nearly $50 billion, would have a material adverse impact on our business going forward and benefit our foreign competitors worldwide." CEO Jensen Huang has called the export restrictions a failure. He said in May: The question is not whether China will have AI. It already does. The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position. The Trump administration will grant licenses allowing Nvidia to sell H20 GPUs in China On Monday, July 14, Nvidia said it has filed applications to resume selling H20 GPUs in China and has received assurances from the U.S. government that licenses will be granted. The news came days after CEO Jensen Huang met with President Trump, and the company plans to begin delivering compliant AI accelerator chips to China soon. Additionally, the Trump administration revoked the Biden-era AI Diffusion Rule earlier this year, which would have limited Nvidia's ability to sell its most advanced AI chips in dozens of countries that have historically been U.S. allies, including Saudi Arabia, the United Arab Emirates (UAE), Singapore, and Israel. The Commerce Department said the AI Diffusion Rule, which was announced during the final days of the Biden administration, would have "stifled American innovation and saddled companies with burdensome new regulatory requirements." Additionally, it would have "undermined U.S. diplomatic relations with dozens of countries by downgrading them to second-tier status." Nvidia has already capitalized on the rescission of the AI Diffusion Rule as more countries lean into sovereign AI -- meaning wholly owned data center infrastructure not subject to control by another nation. Earlier this year, the company announced partnerships that will bring its chips and networking equipment to Saudi Arabia and the UAE. Wall Street analysts are likely to increase earnings estimates for Nvidia Ultimately, the Trump administration's decision to permit the sale of H20 GPUs into China, coupled with its rescission of the AI Diffusion Rule, means Nvidia now has a larger total addressable market. In turn, Wall Street analysts are likely to raise earnings estimates, and upward revisions tend to correlate with share-price appreciation. The Wall Street consensus currently says Nvidia's earnings will grow at 41% annually through the fiscal year ending in January 2027. That makes the current valuation of 54 times earnings look tolerable. However, upward revisions to earnings estimates would make the stock even more attractive. Investors interested in adding shares to their portfolios should consider buying Nvidia stock now.

Nvidia Stock at All-Time Highs: Buy, Sell, or Hold? | The Motley Fool

Nvidia seems to be executing perfectly. But the stock's recent run higher means expectations are high. Nvidia (NVDA 0.37%) stock's 30% slide between Jan. 1 and April 05 has proven to be quite the head fake. Just a few months later, shares are sitting at all-time highs and many analysts think there's more upside ahead. Given the stock's extraordinary momentum, it's a good time to take a close look at the stock. Can the artificial intelligence (AI) chipmaker live up to the high expectations baked into its stock, or is its big move higher an opportunity for shareholders to take some chips off the table? With a price-to-earnings ratio of about 55 at the time of this writing, investors expect not only more impressive growth from Nvidia but sustained growth for years to come. Fortunately, recent results bode well for this sort of growth profile. In May, the AI chip company reported revenue of $44.1 billion, up an incredible 69% year over year. Sequentially, quarterly revenue was up 12% year over year. The quarter's main driver was its data center revenue. The segment, which is responsible for providing chips for artificial intelligence models, rose 73% year over year to $39.1 billion. Looking ahead to Q2, Nvidia expects more strong growth. The company guided for revenue of $45 billion, translating to a year-over-year growth rate of 50%. What's especially encouraging is Nvidia CEO Jensen Huang's optimism regarding the demand environment for its products. Consider these bullish remarks he made in the company's most recent earnings release. Global demand for NVIDIA's AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate. Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and NVIDIA stands at the center of this profound transformation. Given the company's impressive business momentum and the fact that the market for AI chips appears to still be in its early stages, it may be tempting to quickly conclude that Nvidia is a must-buy stock. But there are two concerns about this tech stock that are often overlooked. First, what happens when the current investment cycle for AI chips begins to taper off? Additionally, what happens if other competitors slowly but surely build chips that can serve as alternatives to Nvidia's AI chips? If just one of these threats to Nvidia's business momentum materializes, volume and pricing could be pressured simultaneously -- and this could send shares lower. Of course, bulls would argue that since these are still early days for AI and that the demand for Nvidia's chips will be far higher for much longer than some investors think. Additionally, they'd argue that Nvidia's lead over its competitors is so significant that it's nearly impossible for any of them to catch up. Both of these things may be true. But we live in an uncertain world. Chipmaker Intel, too, was once considered virtually invincible. However, Nvidia and other chipmakers outmaneuvered Intel in terms of power efficiency, graphics, and artificial intelligence, leading to Intel's decline. While it's hard to imagine how Nvidia could be similarly disrupted in the future, embracing some humility when it comes to acknowledging risks is likely a good idea. Considering Nvidia's impressive business momentum alongside the risks associated with a potentially weaker growth rate in the future and rising competition, I believe there's a balanced conclusion when it comes to the takeaway for investors: Shares may be too pricey to buy today. However, the company's incredible execution makes a good case for holding onto the stock if you already own it. However, shareholders should expect a bumpy ride and ensure they are aware of the associated risks.

After Losing More Than $1 Trillion in Market Cap Earlier This Year, Nvidia Has Reclaimed Its Position as the World's Most Valuable Company. Here's Why I Think It's Headed Even Higher. | The Motley Fool

Earlier this year, more than $1 trillion was erased from Nvidia's market value during a months-long, panic-driven sell-off. The first several months of 2025 were painful for Nvidia (NVDA 0.37%) investors. Back in April, Nvidia's market capitalization bottomed around $2.3 trillion -- representing a 37% decline from the peak it reached just three months earlier. There were a number of factors that influenced Nvidia's sell-off. First was the emergence of a Chinese start-up called DeepSeek, which claimed to build its impressive R1 artificial intelligence (AI) model using older Nvidia chips. This led some investors to fear that Nvidia's newest, high-priced chipsets may no longer be necessary to support the world's growing AI infrastructure. Beyond DeepSeek, investors were also concerned about how new U.S. tariff policies would impact Nvidia's growth prospects overseas. Lastly, rising competition from Advanced Micro Devices, as well as investment in custom silicon from cloud hyperscalers like Microsoft, Amazon, and Alphabet, gave credence to the idea that Nvidia's best days may be in the rearview mirror. However, following a bullish earnings report back in May, investors seem to now consider these concerns overblown. As of July 11, Nvidia's market cap is just over $4 trillion -- making the semiconductor darling the most valuable business in the world once again. With shares rocketing higher, it's worth taking a look at Nvidia's valuation trends to assess whether the stock remains a good buy or if some investors have missed the boat. As you can see, Nvidia's current P/S and forward P/E ratios are well below the highs previously seen during the AI revolution. To be clear, this does not necessarily mean Nvidia is destined to reach or eclipse its prior P/S of 46 and forward earnings multiple of 51. Furthermore, the company's multiples do not necessarily need to expand in order for the company to increase in value. Nvidia's future valuation hinges on the company's growth potential. Lets explore some catalysts that could lead to meaningful growth for Nvidia over the next several years. For the last few years, the majority of Nvidia's growth has come from its data center operation. Nvidia designs industry-leading GPUs that are used by the world's largest businesses in their development of generative AI capabilities. However, the company has a number of opportunities outside of AI data centers that investors may be overlooking. First, companies such as Tesla and Alphabet have invested billions developing autonomous driving technology. Nvidia is tapped into self-driving cars too -- during the first quarter, it generated $567 million in sales from its automotive services businesses. This represented 72% year-over-year growth, giving the segment an annual revenue run rate of $2.3 billion. To put that into perspective, Nvidia's data center business generates well over $100 billion in sales per year. While the automotive segment is unlikely to become as large as the data center business, I'm confident Nvidia has much more room to grow in this area as autonomous vehicle technology continues to scale. With partners including General Motors, Toyota Motor, Mercedes-Benz, Volvo, Rivian Automotive, BYD and many more, Nvidia stands to benefit from the broader rise of self-driving cars, making the company an agnostic beneficiary of the autonomous vehicle opportunity. Another related opportunity is the rise of AI-powered robotics. Companies such as Tesla and Figure AI are building humanoid robots that are meant to facilitate the workforce in labor-intensive environments such as warehouses. Moreover, Amazon is integrating a number of robotics-driven processes into its fulfillment centers in order to drive more efficiency. Nvidia is an investor in Figure AI, and CEO Jensen Huang has touted robotics as multitrillion-dollar opportunity within the broader AI realm. Lastly, while companies such as IonQ and Rigetti Computing fetch most of the attention in the world of quantum computing, Nvidia is not a name investors want to sleep on. Outside of hardware, Nvidia also develops an AI software platform called CUDA. The company has quietly adapted this architecture for other applications with quantum computing being one of them via the introduction of the CUDA-Q platform. One thread that stitches autonomous driving, robotics, and quantum computing together is that all three technologies are incredibly nascent. Their commercial reach remains limited, but each has the potential to disrupt a number of industries on a global scale. And Nvidia sits right in the middle with the chips and software to power these technologies. With Nvidia's valuation multiples down from their peak levels, many investors may see the business as a maturing operation. Others may have doubts around Nvidia's ability to continue accelerating growth and are therefore pricing in some of this risk. Given the ideas explored above, I think Nvidia stock is headed higher in the long-run. The resiliency of the company's share price combined with numerous opportunities capable of unlocking further revenue and profits has me optimistic that Nvidia will eclipse its current valuation in the long run. For these reasons, I think now is a compelling time to scoop up some shares of Nvidia and prepare to hold on tight. The next growth wave appears to be just getting started.

Is Nvidia Stock a Buy Now? | The Motley Fool

After starting 2025 poorly, shares of Nvidia (NVDA 0.37%) have rallied impressively in the past three months. The chipmaker hit a 52-week low on April 7, and it has since shot up a remarkable 69% since then to become the first company in the world to achieve a $4 trillion market capitalization. Nvidia's recent jump isn't surprising, as the stock's dip earlier in the year didn't seem justified considering the outstanding growth it has been consistently clocking on account of the terrific demand for its artificial intelligence (AI) chips. However, investors may be wondering right now if it is worth buying more shares of Nvidia following its latest rally. Let's try to find out. Nvidia stock's surge in the past three-odd months has made it expensive. This is evident from the following chart. Investors were getting a great deal on this fast-growing company in early April when its trailing price-to-earnings (P/E) ratio was in the low 30s, well below its five-year average earnings multiple of 70. The forward P/E ratio of less than 25 was even more attractive. The chip giant was trading at a nice discount to the tech-laden Nasdaq-100's average earnings multiple of 32 at that time, and savvy investors who bought the stock then are sitting on impressive gains as of this writing. The good part is that Nvidia still has the ability to justify its expensive multiples and deliver more gains to investors in the future thanks to the multiple catalysts it is sitting on. From AI chips to accelerated computing to cloud gaming to enterprise software, Nvidia is set to benefit from several multibillion-dollar end markets that could help it keep growing at a solid pace for a long time to come. Consensus estimates are projecting a 53% increase in Nvidia's revenue in fiscal 2026 to almost $200 billion. The company's data center business, which produced 88% of its revenue in the previous quarter, is going to account for a huge chunk of its top line in the ongoing fiscal year. Assuming Nvidia's data center business produces 90% of its top line in fiscal 2026, its revenue from this segment would land at $180 billion. That would be a 56% increase over the previous fiscal year. This robust growth is being driven by the huge demand for Nvidia's AI graphics processing units (GPUs) which are being deployed in data centers for AI model training and inference purposes. Nvidia is expected to remain the biggest player in the AI chip market with an estimated market share of 80% to 85%, according to Bank of America. Bank of America analyst Vivek Arya points out that the scale of Nvidia's customer base and its control over the supply chain will ensure that the chipmaker remains the top dog in this lucrative market. That's precisely the reason why Nvidia's data center business still has a lot of room for growth. According toMcKinsey, a whopping $5.2 trillion is expected to be spent on AI data centers by 2030, along with an additional $1.5 trillion on data centers for handling non-AI workloads. The consulting firm also points out that the largest chunk of this projected investment -- 60% -- will go toward companies that design and manufacture chips and computing hardware. That could put Nvidia's potential data center chip revenue opportunity at a whopping $4 trillion after five years, much more than the revenue that the company is likely to generate in the current fiscal year. Even if Nvidia loses ground in the data center chip market to its rivals, it can still witness exponential growth in this segment over the next five years that could send its revenue soaring. At the same time, demand for the company's enterprise AI software solutions, which help customers build AI agents and other applications, apart from helping them manage their AI infrastructure to ensure productivity and security, has been growing at a nice clip. In February 2025, Nvidia management pointed out that its enterprise revenue almost doubled year over year on a quarterly basis as customers are deploying its solutions to fine-tune their AI models and to develop agentic AI applications, among others. The company claims that its generative AI software platform is helping customers to significantly increase accuracy and reduce the response time of their large language models (LLMs). With the enterprise AI market expected to generate $104 billion in revenue in 2030, it won't be surprising to see this business move the needle in a significant way for the company in the long run. Investors would do well to look past analysts' estimates and the valuation metrics, as Nvidia seems to be at the beginning of a remarkable growth curve even after the scintillating gains that it has recorded in revenue and earnings in recent years. Nvidia's potential revenue opportunity is massive enough to help it crush the market's expectations, and that could fuel this AI stock's rise to even a $10 trillion valuation in the next five years.

Could Nvidia Be Your Best Investment in the Second Half of 2025? | The Motley Fool

There are several catalysts that could send the chipmaker higher in the coming months. Over the past few years, Nvidia (NVDA 1.06%) has emerged as the face of the artificial intelligence (AI) revolution. However, during the first half of 2025, the company hit turbulence. Worries about ramping competition, the potential impact of tariffs, and trade restrictions with China weighed on Nvidia's growth. While those concerns are certainly justified, Nvidia's business continues to gain steam. Let's look at three catalysts that could give Nvidia stock a boost in the back half of the year. CEO Jensen Huang has popularized the notion that each country should chart its own course in AI. He's encouraging leaders to create their own infrastructure, assemble and maintain data, and train their workforce to profit from this game-changing technology. Governments of the world appear to be heeding Huang's call. The European Union (EU) has announced plans to build five AI gigafactories across the continent, and 20 individual countries, including Germany, France, Saudi Arabia, South Korea, and the United Arab Emirates (among others), have jumped on the sovereign AI bandwagon. As the leading provider of AI-centric chips, Nvidia's strategy of promoting sovereign AI is brilliant. It's been more than a year since Nvidia announced its Blackwell chips, but these processors only began shipping earlier this year. As such, sales of these next-generation AI chips have only just begun to impact Nvidia's financial results, with the bulk of the revenue expected to hit over the coming year. Leading data center and cloud computing operators have pledged to spend $315 billion in capital expenditures this year, with the vast majority allocated to AI. As the leading provider of data center GPUs, Nvidia stands to benefit from this spending. Nvidia announced this week that it has applied for licenses to sell its H200 chips in China and has assurances from the Trump administration that they will be granted. Estimates suggest that these sales could be nearly $10 billion per quarter, which would be a significant boost for Nvidia. That's why Nvidia could be your best investment in the second half of 2025.

Prediction: 1 AI Stock Will Be Worth More Than Nvidia and Palantir Technologies Combined by 2030 | The Motley Fool

Nvidia (NVDA -0.42%) stock has returned 29% this year, and its market value currently stands at $4.2 trillion. Meanwhile, Palantir (PLTR -0.34%) shares have advanced 104%, and its market value currently stands at $360 billion. That brings their collective valuation to $4.5 trillion. I think Amazon (AMZN 0.97%) can surpass that figure in no more than five years. The company is currently worth $2.3 trillion, so the stock would need to advance 100% for Amazon to achieve a market value of $4.6 trillion. Here's why that seems likely. Amazon has a strong presence in e-commerce, digital advertising, and cloud computing, and all three markets are projected to grow quickly in the next few years. Details are provided below: Through 2030, Grand View Research estimates that online retail sales will increase at 11% annually; ad tech sales will grow at 14% annually; and cloud-computing sales will increase 20% annually. That sets Amazon on track for double-digit annual revenue growth through the end of the decade. But investors have reason to believe earnings will increase more quickly than revenue. Amazon has built over 1,000 generative AI applications to make its retail business more efficient, including tools to optimize inventory placement, demand forecasting, and last-mile delivery routes. The company has also debuted an AI model that makes its robot fleet smarter, and it's building another generative AI model that will let warehouse workers engage fulfillment robots in natural language. Additionally, Amazon is reportedly developing generative AI software for humanoid robots with the initial goal of assisting delivery drivers. The company wants humanoid robots to ride alongside humans in its electric vans and carry packages to doorsteps. Eventually, the entire process could be automated because Amazon is also developing robotaxis through its autonomous-driving subsidiary Zoox. Meanwhile, Amazon is also working with AI to make developers more productive in its cloud-computing division. AWS last year said its developer team used its generative AI assistant Amazon Q to upgrade tens of thousands of production applications. Doing so let the team accomplish in minutes tasks the would have taken days, saving the company $260 million, according to CEO Andy Jassy. Morgan Stanley analyst Brian Nowak recently said Amazon is "one of the companies best positioned to deliver material financial return from physical AI and robotics" in the next few years. He estimates costs related to shipping and fulfillment currently consume about 36% of retail revenue, so the company should become increasingly profitable as it takes steps to automate those workflows. Amazon shares currently trade at 36 times earnings, a reasonable valuation for a company whose earnings are forecast to grow at 18% annually over the next three to five years. If Amazon meets that consensus, its market value can double to hit $4.6 trillion by 2030, while its valuation falls to 31 time earnings. In that scenario, Amazon in five years would be worth more than Palantir and Nvidia's combined market values today.

Got $3,000? 2 Artificial Intelligence (AI) Stocks to Buy and Hold for the Long Term | The Motley Fool

Artificial intelligence (AI) is impacting every sector of the economy, so there are several ways investors can profit from this opportunity. But recent earnings results show that top semiconductor companies are still well positioned to deliver outstanding returns for long-term investors. The AI chip market is expected to grow at an annualized rate of 24% through 2029 to reach $311 billion, according to MarketsandMarkets. If you have $3,000 you're looking to invest right now, here are two chip stocks to consider buying and holding for the long term. Advanced Micro Devices (AMD -2.16%) has become a widely used brand of chips in the consumer PC market. Its Ryzen processors have taken significant market share from Intel. But it's also one of only two suppliers, along with Nvidia, of general-purpose graphics processing units (GPUs) that are used for AI workloads. While Nvidia has a commanding lead in GPUs, it's not going to control 100% of the market. This leaves a substantial opportunity for the runner-up in this market to do well. AMD's data center business is booming, with segment revenue up 57% year over year in the first quarter. AMD is meeting demand for cost-effective alternatives in the chip market. Oracle is experiencing tremendous growth in its cloud infrastructure business right now, and it's a key partner for AMD. Oracle's cloud infrastructure will offer up to 131,072 AMD Instinct MI355X GPUs for AI. AMD has already announced the MI400 series for launch next year, which will enable even better performance for AI training and inferencing. As data center sales make up a larger mix of AMD's total revenue, it is pushing margins up. Higher margins drove a 55% year-over-year increase in adjusted earnings last quarter. Given the long-term opportunity in the AI chip market, which AMD estimates at $500 billion, investors are undervaluing AMD's future earnings. The stock is trading at a forward price-to-earnings (P/E) multiple of 38 on 2025 earnings estimates. But this multiple drops to 25 on 2026 estimates. As AMD continues to expand margins from growth in its data center business, the stock could offer significant upside over the next few years and beyond. Beyond the surging demand for general-purpose chips that AMD supplies, there is growing demand for chips designed for specialized tasks. Broadcom (AVGO -1.12%) is one of the best stocks to profit from the demand for custom chip solutions. Broadcom has been a top-performing semiconductor company for years, supplying components for many markets, including Apple's iPhone. But demand for its application-specific integrated circuits (ASICs) for AI is off the charts. The company's AI chip revenue grew 46% year over year in the most recent quarter. As demand for custom ASICs grows, it also fuels demand for networking products that can handle faster data transfer, which is needed for next-level AI performance. Broadcom's new Tomahawk 6 Ethernet switch has enough data capacity to support 100,000 AI chips working together to train the next-generation AI models. The company's networking business posted revenue growth of 170% year over year last quarter, representing 40% of its AI-related revenue. However, management sees the demand for its custom AI chips outpacing sales of its networking products over time. It's a huge opportunity, as evidenced by Broadcom's momentum. Management expects its AI growth to remain steady through fiscal 2026, which could support new highs for the stock. Broadcom earns very high margins, so the favorable demand outlook points to robust earnings over the next year. The stock trades at 41 times this year's consensus earnings estimate, but that multiple drops to 33 on next year's estimate. These are not cheap valuation multiples, but the investment in AI technology is pointing to substantial growth in the coming years for leading chipmakers, and that should support excellent returns for investors.

After Plummeting Over $1 Trillion in Value, This Super Artificial Intelligence (AI) Stock Is Mounting a Major Comeback, With Analysts Predicting Gains of Up to 400% | The Motley Fool

For a few years now, the artificial intelligence (AI) movement has largely hinged on the performance of a single company: Nvidia (NVDA -0.42%). Sure, if Microsoft or Amazon posted strong results from their respective cloud computing platforms or if Tesla managed to hype investors up over the prospects of self-driving robotaxis or humanoid robots, the technology sector might see a fleeting upward movement. At the end of the day, however, the focus seemed to eventually return to Nvidia -- with analysts obsessing over how demand for the company's chips and data center services were trending. During the first half of the year, Nvidia's ship was caught in an epic storm. Investors started to question the company's long-growth prospects -- inspiring prolonged periods of panic-selling in the process. All told, Nvidia's market cap dropped by more than $1 trillion. But now, with a market value north of $4 trillion, Nvidia has reclaimed its position as the most valuable company on the planet. Even better? Some on Wall Street are calling for further gains of up to 400%. Let's explore the tailwinds supporting Nvidia's long-term growth narrative and detail why Wall Street sees such massive upside for the king of the chip realm. One of the most bullish Nvidia analysts on Wall Street is the I/O Fund's Beth Kindig. Kindig suggested that Nvidia could reach a $10 trillion market cap by 2030 -- implying 140% upside from current levels. Let's explore the main catalysts supporting Kindig's forecast. According to management from Microsoft, Amazon, and Alphabet, roughly $260 billion will be spent in 2025 alone on AI infrastructure. On top of that, Meta Platforms is expected to spend roughly $70 billion on capital expenditures this year -- nearly double what it spent in 2024. Lastly, Oracle is beginning to make significant headway in infrastructure services -- allowing companies to rent Nvidia GPUs from their cloud-based data center platform. From a macro perspective, rising capex from the cloud hyperscalers bodes well for chip demand. Kindig takes these secular tailwinds one step further, suggesting that competition from Intel and Advanced Micro Devices does not pose much of a threat to Nvidia's dominance. While it's hard to know how vendor preferences could change over the next several years, current industry research trends suggest that Kindig might be right -- underscored by Nvidia's rising market share in the AI accelerator industry. The area of Kindig's analysis that I think is currently overlooked the most revolves around Nvidia's software architecture, called CUDA. Since CUDA is integrated tightly with Nvidia's hardware, developers essentially become locked into the company's ecosystem. Not only does this lead to customer stickiness, but it opens the door for Nvidia to be at the forefront of more sophisticated, evolving AI applications in areas such as robotics and autonomous driving. Former management consulting executive Phil Panaro is even more bullish than Kindig. By 2030, Panaro thinks Nvidia's share price could reach $800 -- implying roughly a $20 trillion market cap. Panaro cites opportunities across Web3 development and evolving use cases around how enterprises and governments leverage AI to generate more efficiency and cost savings as the main pillars supporting Nvidia's upside. While these trends could eventually drive significant demand for Nvidia's data center services, tech adoption within the government tends to move slowly. Meanwhile, Web3 remains an emerging concept that could take far longer to mature than Panaro is assuming. Nvidia stock has been mounting an epic comeback over the last couple of months. This valuation expansion can be easily seen through the dynamics of the company's rising forward price-to-earnings (P/E) multiple. Nevertheless, Nvidia's forward P/E of 40 is still well below levels seen earlier this year. Trying to model Nvidia's peak valuation is an exercise in false precision. The bigger takeaway is that analysts on Wall Street are not only calling for significant upside in the stock, but they have outlined the foundation for Nvidia's long-term growth. The important theme here is that Nvidia has opportunities well beyond selling chips -- many of which have yet to make meaningful contributions to the business. I see Nvidia stock as a no-brainer. Investors with a long-run time horizon might consider scooping shares up at current prices and plan to hold on for years to come.

This Artificial Intelligence Stock Has Beaten the Market in 9 of the Past 10 Years. And It's On Track to Do It Again in 2025. | The Motley Fool

Investing in top growth stocks is a great way to achieve strong returns and potentially outperform the market as a whole. The S&P 500 is an index of the leading companies on the U.S. markets, and historically, it has risen by 10% per year, though that's an average including up and down years. That return is not guaranteed, but at such a high rate, an investment would double after a little more than seven years. One artificial intelligence (AI) stock that has routinely outperformed the broad index is Broadcom (AVGO -1.12%). The semiconductor and infrastructure company has benefited from the growth in tech in recent years, and that has allowed it to outperform the market on a consistent basis. With strong gains once again so fare this year, is Broadcom still a great buy, or could it be due for a pullback? Here's a look at just how well Broadcom has performed over the previous 10 years, compared to the S&P 500. Data source: YCharts. What's surprising is that the one year when the S&P 500 did better than Broadcom was 2019, when the index finished higher at nearly 29%, versus 24% gains for Broadcom. The past doesn't predict the future, but the tech stock's terrific run can't be ignored. In 10 years, shares of Broadcom have risen by more than 2,000%, while the S&P 500 has increased by around 200%. As of the end of last week, Broadcom's stock was up around 19% for the year, which was comfortably above the S&P 500's returns of more than 6%. But with a valuation of around $1.3 trillion and Broadcom trading at 33 times its estimated future earnings (based on analyst estimates), it's not a cheap stock to own. The biggest risk is that the company relies heavily on demand from hyperscalers. These are big tech giants that have significant infrastructure needs related to tech and AI. If they scale back on their expenditures, that could significantly weigh on Broadcom's results. The company estimates that its top five customers account for around 40% of its revenue. The company's revenue during the most recent reported period -- which ended on May 4 -- grew by a rate of 20% year over year, as its top line came in at just over $15 billion, while profits more than doubled, rising to nearly $5 billion. If Broadcom can continue producing strong results such as these, it wouldn't be surprising to see it outperform the market once again this year. Though that risk of hyperscalers cutting spending remains. If you're bullish on AI and expect there to be much more growth ahead, Broadcom can make for a compelling investment to simply buy and hold. But at the same time, it's also important to consider the risks ahead, especially as tariffs and trade wars could impact growth in the tech sector in the near future. Earlier this year, Broadcom's stock was underperforming the S&P 500 due to the uncertainty in the markets. While that looks like a distant memory right now, investors should brace for a possible slowdown for the stock as it's trading at an elevated valuation and it may be due for a decline. Its track record may be impressive, but that by no means guarantees it'll always be a market-beating stock.

Nvidia Just Topped a $4 Trillion Market Cap, but a Different Artificial Intelligence (AI) Giant Is Headed to $4.5 Trillion, According to a Certain Wall Street Analyst | The Motley Fool

Nvidia could face a tougher time climbing higher while this stock has room to run. Nvidia (NVDA -0.42%) has skyrocketed in value over the last three years to become the world's first $4 trillion company. The 10x-plus increase in value from three years ago was fueled by the massive spending on artificial intelligence (AI) infrastructure, of which Nvidia's graphics processing units (GPUs) are a key component. Nvidia's dominance of the AI chip market faces some challenges, though. Competing GPU makers are catching up in price performance, and Nvidia's biggest hyperscale customers are leaning more on their custom silicon designs for generative artificial intelligence (AI) applications. That could weigh on its continued growth. Meanwhile, another AI giant could quickly follow Nvidia into the $4 trillion club and climb to $4.5 trillion within a year, according to analysts at Oppenheimer. And right now, the stock looks even more attractive than Nvidia. Nvidia has established itself as the clear leader in developing chips for AI training. Its competitive position is bolstered not just by maintaining more advanced technological capabilities than its next-closest competitor, though. It also leans on its proprietary software, CUDA, making it unlikely another chipmaker can supplant its position. That said, some of Nvidia's biggest customers, like Meta Platforms (META 0.37%) and Microsoft (MSFT -0.33%), are wary of becoming overly reliant on Nvidia for their AI training hardware needs. Meta, for example, is taking its Meta Training and Inference Accelerator platform and applying it to more and more generative AI applications. The next version of its chip is designed to replace Nvidia chips in AI training for its Llama foundation model. It's already using its own chips in some AI inference cases. Microsoft has similar aspirations for its Maia chips, but recently pushed back the timeline for its next-generation AI training chip to 2026 instead of this year. These types of setbacks have hit other hyperscalers in the past, including Meta, resulting in them putting in massive orders with Nvidia. However, as the big tech companies improve their design processes, they could displace a large portion of their demand for Nvidia's chips over time. For now, Nvidia's position looks well protected. That's especially true after news that the U.S. will reverse its ban on the sale of the throttled-down H20 chips in China. Nvidia wrote down $4.5 billion in inventory last quarter after the policy went in place. As a result, the company should produce strong earnings growth through the rest of the year, fueled by China and the hyperscalers. Still, the stock trades for a premium, approaching 40 times forward earnings estimates. At its current price and long-term hurdles, it might not be able to keep climbing as fast as some of the other big AI companies. Few companies even come close to the size of Nvidia at this point. There are just 10 companies with a market cap exceeding $1 trillion as of this writing, and just three of them are worth $3 trillion or more, including Nvidia itself. But Microsoft is the next-closest to Nvidia at about $3.8 trillion as of this writing, and it could join the $4 trillion in the near future, according to analysts at Oppenheimer. They put a $600 price target on the stock, implying a market cap of about $4.5 trillion and 19% upside from its price as of July 15. There are a couple of reasons Oppenheimer's analysts are bullish. First, they see acceleration in Microsoft's Azure cloud computing revenue. Azure has become the growth engine at Microsoft, fueled by demand for compute power needed for AI development. Microsoft's stake in OpenAI not only gives it a huge customer for Azure, but it also brings key tools for other AI developers. That's fueled significant growth in demand. And despite spending $80 billion on capital expenditures, mostly going toward building and outfitting new data centers, Microsoft's management says demand continues to outstrip supply. Even so, Azure is growing faster than any of the three big public cloud platforms. The other reason the analysts are bullish on Microsoft is the potential of its Copilot Studio. While they note demand for Microsoft's native AI assistant Copilot for Microsoft 365 is relatively tepid, the demand for its custom AI assistant platform Copilot Studio could produce much better results. That enables Microsoft to increase prices for its enterprise software suite while increasing retention rates. That should produce even more cash for the company to plow back into Azure and its massive capital return program, fueling earnings-per-share growth through higher earnings spread across fewer shares. Shares of Microsoft have grown relatively expensive in their own right, with the stock trading for about 33 times forward earnings. But that's a reasonable multiple to pay for the stock of a company that's leading the AI industry on two fronts with its cloud computing and enterprise software businesses. It's worth noting that Oppenheimer analysts updated their price target for Nvidia following the news that Nvidia expects the U.S. to reverse its ban on exporting chips to China. They now expect it to reach $200 per share, implying a market cap of $4.9 trillion. But for my money, I think Microsoft is the more attractive investment at the current price.

This Artificial Intelligence (AI) Stock Could Thrive Despite U.S.-China Trade Pressures | The Motley Fool

The U.S. government's current trade tensions with China stretch back to President Donald Trump's first term. But the situation isn't about tariffs alone. The U.S. is competing with its trading partner for supremacy in artificial intelligence. This led to new export restrictions on the sale of AI chips to China on April 9. The updated regulations affect many tech businesses, including AI leader Nvidia (NVDA -0.42%). The company's sales of its popular graphics processing units (GPUs), powerful computer processors that have brought Nvidia success in the AI era, have been hurt by the federal government's export policies around such tech. Even so, several signs suggest Nvidia can continue to thrive despite the trade conflicts between the U.S. and China. Here is a look into Nvidia's potential for ongoing success despite the hurdles. The frosty relations between the U.S. and China adversely affected Nvidia. The new export restrictions meant the company couldn't sell its AI chips earmarked for China, resulting in a $4.5 billion write-off for this unsold inventory in its fiscal first quarter, which ended April 27. China was responsible for $5.5 billion of Nvidia's $44.1 billion in Q1 revenue. This figure could have been higher, since the company was barred from shipping an additional $2.5 billion in AI products in Q1. Lost revenue isn't the only consequence. Nvidia CEO Jensen Huang declared, "The AI race is not just about chips. It's about which stack the world runs on. As that stack grows to include 6G and quantum, U.S. global infrastructure leadership is at stake." In other words, strengthening American leadership in AI depends on organizations around the world building AI infrastructure with U.S. technology platforms, such as Nvidia's proprietary compute unified device architecture (CUDA) software for customizing GPUs. The current trade restrictions limit this from happening, according to Huang. These hurdles are significant, yet Nvidia demonstrated that its business remains strong in the face of such challenges. For instance, despite the loss of sales in China, its $44.1 billion in Q1 revenue represented impressive 69% year-over-year growth. Its perseverance amid China sales setbacks is mirrored in Nvidia stock, which is up nearly 30% in 2025 through July 15, as shares hit a 52-week high of $172.40 on that date. Its soaring shares helped the company become the first to achieve a $4 trillion market cap. Trump congratulated Nvidia on its stock's performance. Huang has visited the White House several times, and the positive relationship he has cultivated with Trump gives Nvidia an edge amid trade pressures. In fact, the company recently announced plans to resume selling its AI chips to China, stating, "The U.S. government has assured Nvidia that licenses will be granted, and Nvidia hopes to start deliveries soon." Huang noted Nvidia's tenacity amid trade tensions, asserting, "Every single year there were rules and taxes and tariffs and policies and regulations, and we survived... and whatever it turns out to be, we'll make the best of it." The company's confidence in its future is illustrated in its fiscal Q2 outlook, which estimates $45 billion in revenue. This is a strong increase from the $30 billion made in the previous year. Nvidia's success to date is poised to continue even if its sales to China remain tepid. The U.S. is its largest source of revenue, contributing $20.7 billion of Q1's $44.1 billion. Moreover, the company's current AI platform, Blackwell, will soon make way for next-generation technology, Vera Rubin, due out in 2026. Vera Rubin is a superchip designed to transform how AI is integrated into supercomputers. Many organizations are rushing to build data centers for their AI systems with Nvidia's products. For example, European manufacturers are building an AI facility focused on boosting industrial manufacturing. This installation will require 10,000 Nvidia GPUs. And Facebook parent Meta Platforms is constructing several data centers reportedly using over 1 million Nvidia GPUs. This kind of hunger for Nvidia's AI products will continue to fuel the company's success for years to come. After all, industry forecasts estimate the AI market will expand from $244 billion in 2025 to $1 trillion by 2031. Although the extent to which its China business eventually recovers is uncertain, Nvidia is poised to remain a key AI player on the global stage, thanks to innovations such as CUDA and Vera Rubin. Its stock's price-to-earnings (P/E) ratio of 55 is getting up there but is still significantly lower than major rival Advanced Micro Devices's 114. With many factors propelling Nvidia's business growth, its stock looks like a great long-term investment.

5 Artificial Intelligence (AI) Infrastructure Stocks Powering the Next Wave of Innovation | The Motley Fool

Demand for AI computing power could push data center spending to nearly $7 trillion by 2030. It will be a massive undertaking to build out the hardware and support necessary to power increasingly advanced artificial intelligence and provide it at a global level where billions of people can access it. According to research by McKinsey & Company, the world's technology needs will require $6.7 trillion in data center spending by 2030. Of that, $5 trillion will be due to the rising processing power demands of artificial intelligence (AI). These investments, though, will lay the groundwork for the next era of global innovation, which will revolutionize existing industries and create new ones. Some key companies have already been experiencing significant growth due to the AI trend, and there is still likely a long runway ahead for players in key AI infrastructure spaces, including semiconductors, cloud computing, and networking. Here are five top stocks to buy and hold for the next wave of AI innovation. Inside these colossal AI data centers are many thousands of AI accelerator chips, usually from Nvidia (NVDA -0.42%). The company's graphics processing units (GPUs) are the only ones that can make use of its proprietary CUDA platform, which contains an array of tools and libraries to help developers build and deploy applications that use the hardware efficiently. CUDA's effectiveness -- and its popularity with developers -- has helped Nvidia win an estimated 92% share of the data center GPU market. The company has maintained its winning position as it progressed from its previous Hopper architecture to its current Blackwell chips, and it expects to launch its next-generation architecture, with a CPU called Vera and a GPU called Rubin, next year. Analysts expect Nvidia's revenue to grow to $200 billion this year and $251 billion in 2026. AI software is primarily trained and powered through large cloud data centers, making the leading cloud infrastructure companies vital pieces of the equation. They're also Nvidia's largest customers. Amazon (AMZN 0.97%) Web Services (AWS) has long been the world's leading cloud platform, with about 30% of the cloud infrastructure market today.Through the cloud, companies can access and deploy AI agents, models, and other software throughout their businesses. AWS's sales grew by 17% year over year in Q1, and it should maintain a similar pace. Goldman Sachs estimates that AI demand will drive cloud computing sales industrywide to $2 trillion by 2030. Amazon will capture a significant portion of that, and since AWS is Amazon's primary profit center, the company's bottom line should also thrive. It's a similar theme for Microsoft (MSFT -0.33%). Its Azure is the world's second-largest cloud platform, with a market share of approximately 21%. Microsoft stands out from the pack for its deep ties with millions of corporate clients. Businesses rely on Microsoft's range of hardware and software products, including its enterprise software, the Windows operating system, and productivity applications such as Outlook and Excel. Microsoft's vast ecosystem creates sticky revenue streams and provides it with an enormous customer base to cross-sell its AI products and services to. Microsoft has also invested in OpenAI, the developer behind ChatGPT, and works with it extensively, although that relationship has become somewhat strained as OpenAI has grown increasingly successful. Regardless, Microsoft's massive footprint across the AI and broader tech space makes it a no-brainer. Within data centers, huge clusters of AI chips must communicate and work together, which requires them to transfer massive amounts of data at extremely high speeds. Arista Networks (ANET -0.06%) sells high-end networking switches and software that help accomplish this. The company has already thrived in this golden age of data centers, with top clients including Microsoft and Meta Platforms, which happen to also be among the highest spenders on AI infrastructure. Arista Networks will likely continue benefiting from growth in AI investments, as these increasingly powerful AI models consume ever-increasing amounts of data. Analysts expect Arista Networks to generate $8.4 billion in sales this year (versus $7 billion last year), then $9.9 billion next year, with nearly 19% annualized long-term earnings growth. Tightly woven into this same theme is Broadcom (AVGO -1.12%), which specializes in designing semiconductors used for networking applications. For example, Arista Networks utilizes Broadcom's Tomahawk and Jericho silicon in the networking switches it builds for data centers. Broadcom's AI-related semiconductor sales increased by 46% year-over-year in the second quarter. Looking further out, Broadcom is becoming a more prominent role player in AI infrastructure. It has designed custom accelerator chips (XPUs) for AI model training and inference. It has struck partnerships with at least three AI customers that management believes will each deploy clusters of 1 million accelerator chips by 2027. Broadcom's red-hot AI momentum has analysts estimating the company will grow earnings by an average of 23% annually over the next three to five years.

These Stocks Are Skyrocketing and Are Still Solid Long-Term Buys | The Motley Fool

Great businesses pursuing massive growth opportunities will see their share prices continuously hit new highs over the long term. This is why investors shouldn't be afraid to buy quality growth stocks at a new high. What matters is understanding the momentum in the business itself, and how long that growth can last. Some analysts have questioned whether the best days of the "Magnificent Seven" are over, yet Nvidia (NVDA -0.42%) and Microsoft (MSFT -0.33%) continue to hit new highs following strong earnings results this year. Here's why these high-flying tech stocks are still solid buys for at least the next five years. Shares of Nvidia are sitting close to new highs after the company just received welcome news. Following a meeting between CEO Jensen Huang and President Donald Trump, the U.S. government will allow Nvidia to resume sales of its H20 chip in China, unlocking billions in quarterly revenue. That said, Nvidia would have been just fine without revenue from China. Even including the China restrictions, analysts were expecting Nvidia to report $200 billion in revenue this year, for an increase of 53% over fiscal 2025 (ending in January). But resuming sales of the H20 should cause analysts to raise their near-term revenue and earnings estimates, likely sending the stock higher. The H20 is basically a watered-down version of the company's more capable H200 data center chip. Sales to China totaled $17 billion last year, or 13% of Nvidia's revenue. The H20 generated $4.6 billion in revenue in fiscal Q1 before it had to cancel shipments due to new licensing requirements for sales to China. The $2.5 billion of revenue that Nvidia left on the table in fiscal Q1 will likely be realized in fiscal Q3, adding more upside to analysts' current $45 billion revenue estimate for fiscal Q2. Nvidia's China business could grow significantly as a percentage of its total revenue over the next year. During the last earnings call with analysts, Nvidia CFO Colette Kress said the company had planned for $8 billion of H20 orders in fiscal Q2 before the restrictions took effect. This just adds more fuel to the fire for Nvidia's near-term momentum. Strong demand for its Blackwell chip should benefit Nvidia's margins and earnings in the second half of the year. Current analyst estimates call for quarterly adjusted non-GAAP (generally accepted accounting principles) earnings growth to accelerate to 47% year over year in fiscal Q2, before growing 44% in fiscal Q3, and 50% in fiscal Q4. However, these estimates likely exclude additional H20 sales, since this news just broke in the last week. While there is a lot of noise around competition with custom chipmakers, Nvidia can grow at high rates for several years. The investment in artificial intelligence (AI) infrastructure is a gigantic opportunity, large enough for multiple suppliers to do well. Nvidia is already preparing to launch the next-generation Vera Rubin chip next year, which should keep its momentum going. Looking out to fiscal 2030, analysts expect Nvidia's revenue to grow at an annualized rate of 21%, reaching $342 billion. Earnings are expected to grow slightly faster, at 23%. This lines up with Huang's expectation that Nvidia will capture a large portion of the $1 trillion in annual data center spending projected in the next four years. The stock could climb at similar rates as earnings, which makes Nvidia an excellent growth stock to buy and hold for the long term, even at its current price around $170 a share. Microsoft reported better-than-expected demand for AI services in its enterprise cloud business last quarter. As a leader in productivity software, Microsoft can benefit tremendously over the long term from AI integration across its products. It's for these reasons that the stock has skyrocketed to new highs since its fiscal Q3 earnings report in late April. Microsoft Azure is the second-leading enterprise cloud provider that continues to gain share of a growing $348 billion market, according to Synergy Research. Azure revenue grew 33% year over year last quarter, but what got investors' attention was that 16 percentage points of Azure's growth was driven by AI services. It seems every industry is embracing this revolutionary technology and doubling down on it. Microsoft sent a strong signal that the ramp in AI investment is just getting started. CEO Satya Nadella noted that the company is expanding its data center capacity, opening 10 new data centers across 10 countries. The company's AI-powered assistant, Microsoft Copilot, has attracted hundreds of thousands of corporate customers, up three times year over year in the last quarter. It is winning bigger deals for Copilot in the enterprise market, and existing customers are returning to buy more seats for their employees. Microsoft is even prepared for the next major advancement in cloud services with its range of software and development tools for quantum computing. The Azure Quantum platform has multiple leaders providing simulators and other tools for customers, including IonQ and Rigetti. Microsoft's AI investments and leadership in software put it in a great position, which is reflected in analysts' growth estimates. Current estimates call for Microsoft to report $279 billion for fiscal 2025 ending in June, and that is expected to grow at an annualized rate of 13% over the next four years. Earnings should grow marginally faster, at a 15% annualized rate. This is enough growth to double the stock by 2029.

Nvidia and Broadcom: Here's How These Top AI Stocks Are Doing 1 Year After Their Stock Splits | The Motley Fool

What is a stock split, and why do companies go this route? These operations enable a company to bring down a soaring stock price to more reasonable levels, making the stock more accessible to a broader range of investors. Nvidia and Broadcom even said they decided on splits to make it easier for employees and investors to get in on their shares, which had surged more than 200% and about 100%, respectively, in 2023. Stock splits don't change the total market value of the company or anything fundamental, though. They simply involve offering more shares to current holders according to the ratio of the split. So, for example, in a 10-for-1 stock split, if you originally held one share, you would hold 10 shares post-split -- but the total value of your holding would remain the same. Because of this, a stock split alone isn't a reason to buy or sell a stock. Still, it's interesting to see how stock split players have performed a year after these operations, so let's take a look at both Nvidia and Broadcom a year after their splits. Nvidia completed its 10-for-1 stock split on June 7 of last year, with shares trading at the split-adjusted price as of June 10. This brought the shares down from about $1,200 to $120. Since that time, Nvidia stock has experienced ups and downs, but it's delivered a gain of more than 40%. As mentioned, this operation isn't the reason investors have flocked to Nvidia over the past year (though a lower price per share may have made it easier for some to get in on the growth story). What has driven Nvidia's share price performance is the ongoing high demand for its graphics processing units (GPUs), or AI chips, and related products and services. What also helped this AI leader was its strong execution of a big launch: Nvidia released its Blackwell architecture and chip this past winter to demand that CEO Jensen Huang called "insane." The company generated $11 billion in revenue from Blackwell in its very first quarter of commercialization and maintained a gross margin above 70%, ensuring high profitability on sales. Although investors worried about potential headwinds, such as import tariffs or a decrease in AI spending, these concerns have eased. Trade talks have spurred optimism that tariffs may not be as hefty as initially expected, and companies have reiterated their AI investment plans. All of this helped boost Nvidia's shares in recent weeks, even pushing the company to a $4 trillion market cap, making it the first company ever to reach this level. Broadcom executed its stock split on July 12, and the stock began trading on July 15 at the new price. Like Nvidia, the company decided on a 10-for-1 split to bring its share price down -- in this case, from about $1,700 to $170. Broadcom stock has also climbed in the double digits since the operation, rising more than 65%. And like Nvidia, Broadcom saw its shares take off thanks to demand from AI customers. This company is a networking leader, making thousands of products used in a variety of locations -- from your smartphone to major data centers. But in recent times, demand from big cloud service providers to support their AI development has helped revenue skyrocket. In the most recent quarter, AI revenue surged 77% to $4.1 billion, and the company says it expects this momentum to continue in the current quarter and through the next fiscal year. This is amid demand for both connectivity products and Broadcom's accelerated processing units (XPUs), a type of processor for specific AI tasks. The company says its networking expertise and wide range of products -- from switches and routers to network interface cards (NICs), which connect computers to networks -- have been key growth drivers as cloud service providers ramp up their AI platforms. Broadcom stock followed a similar path to Nvidia, declining in April of this year due to general tariff concerns, but it has also rebounded and is on the rise today. The stock even closed at a record high just a few days ago. Both Nvidia and Broadcom have completed successful post-split years, scoring double-digit gains. Nvidia is slightly less expensive from a valuation standpoint than it was a year ago, but Broadcom's valuation has advanced. Still, these AI players remain reasonably priced, considering their earnings track record and long-term prospects in this growth market. It's impossible, of course, to guarantee what these stocks will do next, but the current environment supports the idea of more gains ahead. Even more importantly, Nvidia and Broadcom are well positioned to win in the AI market over the long run.

2 Top AI Stocks to Buy With $1,000 | The Motley Fool

There is a lot you can do with $1,000. But if you want to get a step closer to sustainable wealth, consider putting that money to work in the stock market. The burgeoning generative artificial intelligence (AI) industry gives investors an excellent opportunity to bet on a megatrend that may eventually rival the internet in its impact on global productivity. Let's explore why Super Micro Computer (SMCI -1.86%) and Advanced Micro Devices (AMD -2.16%) look like solid long-term bets. Popular consumer-facing AI apps like OpenAI's ChatGPT rely on a vast supply chain of enabling infrastructure. And while chipmakers like Nvidia or AMD produce the graphics processing units (GPUs) needed to train and run these algorithms, Supermicro supplies the computer servers that make these chips usable for the end client. The company's business is booming as demand for AI hardware continues to accelerate. Third-quarter revenue jumped a respectable 20% year over year to $4.6 billion, helped by demand for Nvidia's new Blackwell GPUs and Supermicro's proprietary liquid cooling solutions designed to help clients prevent their massive data centers from overheating. As a middleman in the AI hardware industry, Supermicro doesn't have the strongest economic moat. Its AI servers face stiff competition from foreign rivals in lower-cost nations like Taiwan (Inventec, for example). However, Supermicro's extensive U.S. manufacturing footprint will allow it to benefit from made-in-America policies and incentives, which include tariffs and tax benefits for domestic production under the recently signed spending bill. With a forward price-to-earnings (P/E) multiple of just 16, Supermicro shares are remarkably affordable compared to the S&P 500 index average of 24 and alternative AI hardware company Nvidia, which trades for 38 times forward earnings. Like Supermicro, AMD operates on the hardware side of the AI industry, competing with its main rival, Nvidia, to produce off-the-shelf hardware solutions for training and running AI algorithms. While AMD is in a distant second place (with an estimated market share of just 14.5% in AI chips compared to Nvidia's 85.2%), its more diversified business model could give it protection against a potential AI industry downturn. In some ways, Nvidia has become the victim of its own success. In the first quarter, its data center segment represented a whopping 89% of total revenue, making the company a one-trick pony. On the other hand, AMD gets just half of its sales from its data center segment. And AMD still enjoys a healthy contribution from different business verticals like its client segment (CPUs for laptops) and gaming hardware. That said, AMD's data center segment will be its long-term growth engine as the company competes with its larger rival by offering better value for money. First-quarter revenue jumped 36% year over year to $7.4 billion, driven by sales of its new EPYC CPU and Instinct GPU chips, designed to handle advanced AI workloads. While net income grew 55% year over year to $1.57 billion, the stock is a little pricey with a forward P/E of 39. Supermicro and AMD are both great picks for AI-focused investors seeking alternatives to Nvidia in the hardware side of the industry. But Supermicro looks like the better pick because of its rock-bottom valuation and potential to benefit from the federal protectionist economic policies. While AMD also looks like a winner, it already trades at a significant premium over the alternatives.

3 Scorching-Hot Artificial Intelligence (AI) Stocks Primed for a Stock Split -- One of Which Is a Familiar Face (No, Not Nvidia or Palantir!) | The Motley Fool

The AI arena might be a hotbed for the next round of stock-split stocks. Since late 2022, the evolution of artificial intelligence (AI) has been Wall Street's hottest trend. The ability for software and systems empowered by AI to make split-second decisions without the aid of humans is a game-changing technology that the analysts at PwC estimate can add $15.7 trillion to the global economy come 2030. But AI isn't the only trend captivating the attention and wallets of investors. Excitement surrounding stock splits in influential businesses has also played a key role in sustaining the current bull market. There's arguably nothing more intriguing for investors than combining the stock market's two hottest trends: AI + stock splits. A stock split is an event that allows publicly traded companies to alter their share price and share count by the same factor without having any impact on their market cap or underlying operating performance. In particular, investors gravitate to businesses completing forward splits, which are designed to make their share price more nominally affordable for everyday investors. Although dozens of stocks have rallied in the wake of the AI revolution and stock-split euphoria, only a very small handful of artificial intelligence companies appear primed to become Wall Street's next stock-split stocks -- one of which fairly recently enacted its first-ever split. And no, despite their impressive rallies, neither Nvidia (NVDA -0.42%) nor Palantir Technologies (PLTR -0.30%) have reached the point where their respective share prices have become prohibitive to retail investors -- so neither face of the AI movement makes the list. The first AI stock that can strongly benefit from a forward split is preeminent endpoint cybersecurity company CrowdStrike Holdings (CRWD 1.30%). CrowdStrike hasn't split its stock since going public in June 2019, but recently had its share price briefly blow past the psychological $500 level. With nearly 30% of its shares held by everyday investors, the catalyst for a stock split is absolutely there. One of the beautiful aspects of cybersecurity from an investment standpoint is that it's evolved into a basic necessity. With businesses shifting their data and that of their customers online and into the cloud at an accelerated pace, demand for protection from third-party cybersecurity companies like CrowdStrike is only increasing. This suggests CrowdStrike's operating cash flow should be highly predictable year after year, regardless of how well or poorly the U.S. economy is performing. On a company-specific basis, CrowdStrike's Falcon security platform has resonated with its enterprise clients. This platform leans on AI and machine learning tools to grow smarter and more efficient over time. Falcon is nimbler than on-premises security solutions, and the company's clients have demonstrated a willingness to pay a premium for it services. Historically, CrowdStrike has sustained a gross retention rate of around 98%. Something else that's incredibly impressive about CrowdStrike Holdings has been its ability to encourage its clients to purchase additional high-margin services. As of the end of April, nearly half (48%) of its customers had purchased at least six cloud modules, with 22% buying eight or more. Subscription-driven software-as-a-service models typically generate jaw-dropping margins. CrowdStrike is delivering an 80% subscription gross margin and is targeting 82% to 85% over the long run. The foundation has been laid for CrowdStrike stock to head higher, which puts a forward stock split squarely in sight. A second artificial intelligence stock that may be primed to become the next stock-split stock is something of a familiar name: networking specialist Broadcom (AVGO -1.09%). Broadcom completed its first-ever split (10-for-1) in mid-July 2024, and it's rallied back to almost $290 per share, as of this writing on July 17. Since over a quarter of its outstanding shares are held by retail investors, there may be fresh calls for Broadcom to make its stock more accessible to those who can't buy fractional shares through their broker. Whereas Nvidia is the undisputed top choice for graphics processing units (GPUs) used in AI-accelerated data centers, Broadcom's networking solutions are among the top choices used to connect tens of thousands of GPUs in order to maximize their compute capacity and minimize tail latency. In English, Broadcom's solutions ensure rapid split-second decision-making by AI-empowered systems with minimal lag. According to Broadcom CEO Hock Tan, a trio of hyperscale customers should account for the bulk of its AI growth through 2027. Tan estimates his company's AI sales can catapult from a reported $12.2 billion in fiscal 2024 (ended Nov. 3) to between $60 billion and $90 billion in three years. But it's important to recognize that Broadcom is more than just an AI stock. It's also one of the top providers of wireless chips and accessories used in next-generation smartphones. Further, it provides an assortment of networking and optical components for the industrial sector, as well as enterprise cybersecurity solutions. While it's not guaranteed that Broadcom's near-parabolic climb over the last two years can continue, another stock split may be in order if it does. The third AI stock that appears more than ready to become Wall Street's next stock-split stock is software legend Microsoft (MSFT -0.33%). Microsoft has completed nine splits since its initial public offering in March 1986, but last adjusted its share price for investors in February 2003. More than a third (34%) of its outstanding shares are held by noninstitutional investors. Microsoft's AI chops are primarily tied to its applications. Azure, which is the world's No. 2 cloud infrastructure service platform by total spending, is incorporating generative AI solutions and allowing clients to build and train large language models on the platform. Azure may able to sustain or accelerate its roughly 30% growth rate with the aid of artificial intelligence. However, it's important not to forget about Microsoft's legacy platforms, such as Windows and Office. Though the growth heydays for these segments are long gone, Windows still dominates on desktops and laptops. Selling high-margin software provides significant operating cash flow that Microsoft can reinvest in faster-growing initiatives, such as cloud-computing, AI, and even quantum computing. Speaking of cash, Microsoft is sitting on quite the treasure chest. It closed out the March quarter with $79.6 billion in cash, cash equivalents, and short-term investments, and has generated $93.5 billion in net cash from its operations through the first nine months of fiscal 2025 (its fiscal year ended on June 30). This cash affords the ability to take risks, make acquisitions, and reward shareholders via dividends and share buybacks. With Microsoft stock surpassing $500 per share, the need for a forward stock split is growing.

Is Nvidia Stock a Buy Now? | The Motley Fool

In April, I highlighted Nvidia (NVDA -0.42%) as one of two tech stocks that looked surprisingly cheap when it was trading for around $100 per share. A few months later, the stock trades at $173, making the chip supplier the most valuable publicly traded company in the world, with a market capitalization topping $4.2 trillion. With shares near all-time highs, let's take a closer look at Nvidia's most recent earnings, what management is saying about the future, and whether the stock still looks like a buy today. Nvidia's meteoric rise was made possible with unprecedented growth, which was exemplified by Nvidia's fiscal Q1 2026 results. The company generated $44.1 billion in revenue, up 69% year over year and 12% quarter over quarter. The highlight was its data center segment, which produced $39.1 billion alone, fueled by continued demand from cloud providers, government agencies, and enterprises building out artificial intelligence (AI) infrastructure. As for its bottom line, Nvidia posted $18.8 billion in net income for the quarter, up 26% from the prior year but down 15% from the preceding quarter. The decline was primarily due to a $4.5 billion inventory charge related to U.S. export restrictions on its H20 chips, which were designed specifically for the Chinese market. In April, the U.S. government imposed new rules requiring Nvidia to obtain a license to sell these chips to China, a key growth market now effectively out of reach. As a result, the company was forced to write down excess inventory and purchase commitments tied to the H20 line. CEO Jensen Huang was blunt on the earnings call: "The $50 billion China market is effectively closed to U.S. industry," he said. "Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position." More recently, however, Nvidia revealed that it's actively seeking approval to resume H20 sales in China. The company noted that U.S. officials committed to issuing the necessary licenses, with shipments expected to begin shortly. As part of the arrangement, Huang reiterated Nvidia's plans to boost U.S.-based investment, including job creation, bolstering domestic AI infrastructure and expanding manufacturing operations. For now, Huang and Nvidia appear to be navigating the geopolitical turbulence with minimal long-term damage. Following the update, shares rose 4%, suggesting investors are optimistic that the worst may be in the past. And looking ahead, Nvidia previously guided for $45 billion in revenue for the second quarter, with an $8 billion shortfall tied to export limitations. Those results may fare even better now that those limitations have been lifted, albeit late in its fiscal second quarter. In its most recent quarter, Nvidia reported a formidable $53.7 billion in cash and marketable securities, a 71% increase from $31.4 billion the year prior. That cash generated $515 million in interest income during the quarter, more than double the $244 million paid out in dividends. With a dividend yield of just 0.02%, Nvidia's management clearly favors share repurchases as its primary method of returning capital to shareholders. In the first quarter of its fiscal year, the company bought back $14.1 billion worth of stock, up from $7.7 billion a year earlier. While that figure is modest relative to Nvidia's $4.2 trillion market cap, it still signals management's confidence in the company's long-term value, even after its extraordinary stock surge. Moreover, share repurchases enhance the value of existing holdings by shrinking the total share count, which Nvidia trimmed by 2% over the past three years. Nvidia's stock is no longer the bargain it was a few months ago, with a valuation of nearly 40 times forward earnings. But valuation alone doesn't tell the whole story. Nvidia is the undisputed leader in AI computing, a position becoming more entrenched with each product cycle. For a glimpse at how much companies are spending on AI, look no further than tech giants Amazon, Apple, Meta Platforms, and Microsoft, which are expected to spend at least $320 billion on technology in 2025, including data centers, up from $230 billion in 2024. Huang underscored Nvidia's growing leadership in AI computing, calling this era "the next industrial revolution." The company continues to push the boundaries of innovation, most recently with the launch of its Blackwell NVL72 AI supercomputer, a "thinking machine" built for advanced reasoning, which is now in full-scale production. Without question, Nvidia has positioned itself at the forefront of this revolution; however, with its stock surging in recent months, some investors might opt for a pullback before entering. For long-term investors, a more gradual approach, such as dollar-cost averaging, may offer a prudent strategy for gaining exposure to one of the most influential companies driving the future of technology.

Major analyst revamps Nvidia stock price target after China surprise

Chip giant Nvidia (NVDA) continues writing new chapters in the AI playbook. A smashing success thus far, 2025 has been marked by blockbuster earnings and historic market cap highs. Don't miss the move: Subscribe to TheStreet's free daily newsletter Yet, there were a few moments when the momentum seemed to slip, as if something major had stalled. However, a seismic breakthrough may have repositioned Nvidia to be the center of AI and the one defining its future. Nvidia: A $4 trillion juggernaut fueled by AI demand Nvidia's performance in 2025 has been nothing short of historic. It started off the year with fireworks, as its fiscal Q4 results in February blew past expectations. Revenue surged to $39.3 billion, a massive quarter that helped erase the sting of the Deep Seek-led $600 billion market cap drop in January. Its Q1 earnings print was perhaps even more impressive. Nvidia posted $44.1 billion in sales for the quarter ending April 27, up a superb 69% year-over-year. Data center sales skyrocketed 73% to $39.1 billion, fueled by relentless demand for generative AI. Wall Street didn't hesitate, either. The stock's up over 22% year-to-date, having surpassed the $4 trillion market cap (the first company to do so). A huge part of what's driving its fundamentals and stock is Blackwell. Nvidia's new Blackwell AI chips have taken the data center business by storm, now accounting for roughly 50% of total sales. Their performance edge, along with Nvidia's robust CUDA ecosystem, has made Nvidia a no-brainer for enterprise and hyperscale AI customers. Needham lifts Nvidia stock forecast to $200 as China sales path reopens Needham is the latest Wall Street giant to crank up Nvidia's price target, and the jump is big. The firm bumped its price target to $200 from $160, while maintaining a buy rating, following Nvidia's confirmation that it's gearing up to resume H20 chip sales to China. U.S. government assurances that export licenses for those chips will be granted have cleared the path for Nvidia to restart a sales channel - worth billions - that's been locked for months. N. Quinn Bolton and his team note that the April export controls led to $2.5 billion in H20 product being impacted for Q1 fiscal 2026. Also, the restrictions froze an additional $8 billion worth of orders lined up for Q2. That sales freeze in particular hit the hardest, since the H20 was designed specifically to comply with earlier restrictions. Now, Needham expects a rebound. The firm is modeling a whopping $3 billion in H20 shipments per quarter beginning in Q3 (October), stretching over multiple quarters. It also flagged a much deeper product push that could underscore the company's China comeback. Nvidia is looking to build localized variants of its Blackwell GPUs like the B30, B40, and RTX 6000D, with shipments expected to begin early in August or September. These chips will be export-compliant and tailor-made for customers navigating the geopolitical climate. More Tech Stock News: For Nvidia, it couldn't come at a better time. Following months of geopolitical whiplash, a clear path back into the China AI market could help Nvidia regain sales, solidify its footprint, and reestablish momentum in the region. Dan Ives and Gene Munster turn up the volume on Nvidia Wall Street's tech bulls are also singing the praises of Nvidia's China pivot. Wedbush's Dan Ives hails the H20 sales reset as a "watershed moment" and a "monster win" for CEO Jensen Huang after his meeting with President Donald Trump. Ives calls this a high-stakes poker move in the U.S.-China tech race, helping Washington retain leverage in the AI arms race. The firm expects Street estimates to "go up meaningfully" as China reopens, considering the market contributes 15% of Nvidia's revenue. Gene Munster of Deepwater Asset Management is perhaps even more aggressive. He feels the update should add a hefty 10% to Nvidia's consensus sales estimates over the next four quarters. Also, Nvidia's growth could hit 35% or more for its current fiscal year. In short, Munster believes the market is underestimating how early we're placed in the investment cycle. China's demand for H20 chips shows that this boom still has legs. Investors seem to agree, with Nvidia stock popping 4% on the news. But if Munster and Ives are right, this rally might just be the warm-up act. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc. This story was originally published July 16, 2025 at 8:33 PM.

Nvidia's H20 Chips Get a Second Wind in China: What Changes Now? | Investing.com UK

After months of trade restrictions, NVIDIA Corporation (NASDAQ:NVDA) has received the green light from Washington: the US chip manufacturer is allowed to resume deliveries of its H20 AI chips to the People's Republic. This was announced by Nvidia CEO Jensen Huang at a press conference in Beijing. According to Huang, the US government has approved the application for the relevant export licences. The decision marks a significant easing of the trade conflict between the US and China. Although the details of the agreement have not yet been made public, both sides have apparently made concessions: Washington demanded that China relax its export controls on rare earths, while Beijing pushed for the lifting of US technology export bans. Huang had previously held talks with US President Donald Trump on artificial intelligence. He also met with representatives from politics and industry in Beijing. Since April, Nvidia's H20 chips, and even their versions slimmed down specifically for the Chinese market, have been subject to strict export restrictions. Sales restrictions on high-performance chips had already been imposed under President Joe Biden due to concerns about military use by China. Nvidia pointed out that further technical reductions to the chips were no longer possible. Before the restrictions, Nvidia had sold H20 chips worth $4.5 billion to China. With the new approval, business could now pick up again. In our multi-part video series, we discuss a total of six stocks from the semiconductor sector and show which ones are worth investing in and which ones are best avoided. In the following synchronised video, we discuss Nvidia and AMD (NASDAQ:AMD).

Nvidia: What Investors Should Worry About as Stock Breaches Uncharted Territory | Investing.com UK

Nvidia's (NASDAQ:NVDA) stock has surged to record highs following news that the Trump administration will grant licenses to resume H20 chip sales to China, potentially recovering up to $15 billion in revenue. While the company trades at a market cap of $4.22 trillion with impressive fundamentals, investors should be cautious about stretched valuations, manufacturing constraints, and the underlying sustainability of AI demand as the stock enters uncharted territory. Nvidia has once again captured Wall Street's attention, with shares climbing to new record highs following a surprising policy reversal from the Trump administration. The chipmaker's stock closed at $173.00, up 0.95%, with pre-market trading pushing it even higher to $173.81. This latest surge comes after months of uncertainty surrounding the company's ability to serve one of its most crucial markets -- China -- which historically represents a significant portion of Nvidia's revenue stream. As the AI chip giant navigates through regulatory complexities and unprecedented demand, investors are left weighing the potential for continued growth against mounting risks that could challenge the company's astronomical valuation. The roots of Nvidia's China crisis trace back to April 2025, when the Trump administration unexpectedly banned the company from selling its H20 chips to Chinese customers, citing national security concerns. This move sent shockwaves through the market, causing Nvidia's stock to tumble as investors grappled with the implications of losing access to what CEO Jensen Huang estimates is a $50 billion AI market. The ban resulted in immediate financial consequences, with Nvidia reporting $2.5 billion in lost sales during the first quarter and projecting an additional $8 billion in lost revenue for the second quarter. The policy reversal came as a surprise to many, announced following Jensen Huang's second visit to Beijing this year and a meeting with Trump at the White House. The Trump administration's decision to grant licenses for H20 chip sales appears to be strategically motivated, with analysts suggesting it aims to create competitive pressure against Chinese competitors like Huawei. Wall Street analysts at Stifel, Bernstein, and William Blair now project that Nvidia could recoup between $10-15 billion in revenue from China in the second half of the year, potentially reaching $20 billion for the full 2026 fiscal year. Market reaction has been overwhelmingly positive, with Stifel analyst Ruben Roy raising his price target to $202 from $180, citing "pent-up demand" and an expected "accelerated cadence of H20 ingestion from China customers." However, some analysts remain cautious about the sustainability of these sales, noting that the approval came partly because Huawei's recent offerings may be superior to the H20, potentially forcing Nvidia to compete on price rather than premium margins. Nvidia's current stock performance reflects the market's continued confidence in the company's AI dominance, with shares trading at $173.00 and a staggering market capitalization of $4.22 trillion. The company's year-to-date return of 28.85% significantly outpaces the S&P 500's 7.07% gain, while its one-year return of 46.67% dwarfs the index's 12.69% performance. More remarkably, Nvidia's three-year return of 999.16% and five-year return of 1,601.42% demonstrate the extraordinary wealth creation the company has delivered to shareholders during the AI revolution. The company's financial metrics paint a picture of exceptional profitability and growth. With a trailing P/E ratio of 55.81 and a forward P/E of 38.76, Nvidia trades at a premium that reflects high growth expectations. The company's profit margin of 51.69% and return on equity of 115.46% showcase its ability to generate substantial returns from its AI chip business. Revenue of $148.51 billion and net income of $76.77 billion underscore the massive scale at which Nvidia operates, with diluted EPS of $3.10 reflecting strong per-share earnings. Analyst sentiment remains largely bullish, with the consensus price target of $173.92 essentially matching the current stock price, suggesting fair valuation at current levels. However, price targets range from a low of $100 to a high of $250, indicating significant disagreement among analysts about the stock's true value. Recent analyst upgrades following the China news have pushed some targets above $200, but concerns about manufacturing capacity at TSMC and the sustainability of AI demand continue to create uncertainty about the company's ability to meet these elevated expectations. Despite Nvidia's impressive fundamentals, several risks warrant careful consideration for investors entering at current levels. The company's valuation metrics reveal a stock trading at extreme multiples, with a price-to-sales ratio of 28.81 and a price-to-book ratio of 50.32. These ratios suggest that much of the company's future growth is already priced into the stock, leaving little room for disappointment. The forward P/E of 38.76, while lower than the trailing P/E, still represents a significant premium that requires sustained high growth rates to justify. Manufacturing constraints present another significant risk factor. Stifel analyst Ruben Roy has highlighted that Nvidia's ability to meet demand depends heavily on manufacturing capacity at TSMC, which he describes as "tight." This bottleneck could limit the company's ability to capitalize on the recovered China market and broader AI demand. Additionally, the competitive landscape is evolving rapidly, with companies like AMD (NASDAQ:AMD) gaining market share and Chinese competitors like Huawei developing alternative solutions that could erode Nvidia's dominance over time. The sustainability of AI demand represents perhaps the most fundamental risk facing Nvidia investors. Recent developments, including China's DeepSeek achieving competitive AI performance with older, less expensive chips, have raised questions about whether the massive capital expenditures on cutting-edge AI hardware are necessary. Reddit (NYSE:RDDT) discussions among investors reveal growing skepticism about the AI spending boom, with some comparing it to previous technology bubbles. If the AI revolution proves less transformative than expected, or if technological breakthroughs reduce the need for Nvidia's premium chips, the company's current valuation could face significant pressure. The fact that Nvidia's stock surged $200 billion in market cap on news of $15 billion in potential revenue recovery suggests that market sentiment may be disconnected from fundamental value creation. ***