NVIDIA Stock Price Rise on China Good News: Will the Gains Hold?

NVIDIA stock price rose for the second consecutive day after receiving some good news from China, a key market it is fighting to keep. It rose to $184 on Friday, up from this month’s low of $177. This article explores whether NVDA stock will hold these gains as top clients publish their numbers.

China Set to Approve NVIDIA H200 Chip Shipments

The main reason the NVDA stock price rose for the second consecutive day was a Bloomberg report that said Beijing had asked its biggest technology groups to prepare for NVIDIA’s H200 chip purchases.

According to Bloomberg, officials have approved purchases by companies like Alibaba, Tencent, and ByteDance, the parent company of TikTok. Other companies are going through the approval process.

The new development is important as media reports earlier this week said that China had blocked local companies from buying these chips. A report released by the Financial Times last week said that suppliers of these chips had paused production.

China is an important market for the semiconductor industry and Reuters reported that local companies had placed orders of over 2 million H200 chips, currently valued at over $54 billion. NVIDIA has pushed TSMC, its manufacturer, to boost production of these chips to meet demand.

The main challenge that NVIDIA faces in China is that competition has become stiff, with companies like Cambricon, Huawei, MetaX, and Moore Threads gaining market share. While their chips are of a lower quality, analysts believe that they will catch up in the next few years.

NVIDIA’s Biggest Clients are Publishing Results Soon

The next important driver of NVIDIA’s stock price is that its biggest clients will publish their results over the next two weeks and unveil plans for capital expenditures.

Microsoft, Meta Platforms, and Tesla will publish their results next week, while Amazon and Alphabet will release their numbers a week later.

While NVIDIA does not mention its clients, studies note that US big tech companies account for over 50% of its revenue. The other revenue comes from other companies like CoreWeave and Nebius.

A sign that some of these companies are planning to reduce their capital expenditure will be bearish for the NVIDIA stock price as it will directly impact its growth.

However, Jensen Huang, the CEO, has insisted that the AI industry is still growing and that his company is largely sold out, while Taiwan Semiconductor’s capacity to increase production remains limited.

Analysts Expect NVIDIA’s Growth to Accelerate

Most Wall Street analysts are highly optimistic that the company’s growth will continue in the foreseeable future.

For example, the average estimate is that NVIDIA’s fourth quarter revenue will come in at $65.56 billion, up by 66% from the same period in 2024. NVIDIA has a long history of beating analysts’ estimates, meaning that its real figure will be much higher than this, potentially $67 billion.

Analysts expect the company’s annual revenue to be $323 billion in 2026, up 51% from 2025. However, that estimate does not include the new Chinese business, so it will be much higher than the estimate.

These estimates explain why analysts believe the company is cheap, with the average target price at $253, well above the current $183.

NVIDIA Stock Price Technical Analysis

The daily timeframe chart shows that the NVDA share price may drop to $128 before rebounding. That is because it has formed a head-and-shoulders pattern, a common bearish reversal pattern.

It is now hovering at the right shoulder, slightly above the neckline, at $170. It also remains below the 50-day Exponential Moving Average (EMA), while the Supertrend indicator has turned red.

Therefore, a move below the neckline at $169 will confirm the bearish outlook and point to more downside, potentially to $150 and below.