Nvidia Could Add Billions From China Sales If H20 GPUs Get Green Light From US: Analyst

Bank of America analyst Vivek Arya reiterated a Buy rating on Nvidia (NVDA) with a $220 price target, significantly raising sales and EPS forecasts. Arya projects Q2 revenue at $47 billion, FY26 sales at $210-215 billion with EPS of $4.70-4.80 (above consensus), and FY27 EPS approaching $7, driven by robust hyperscaler AI capex and the Blackwell GPU ramp. While acknowledging near-term volatility and regulatory risks for China-bound H20 shipments, the long-term outlook remains bullish, with a potential $10 long-term EPS target.

Analysis

Bank of America's analysis reaffirms a bullish stance on NVIDIA, underpinned by significant upward revisions to financial forecasts that exceed current consensus estimates. The analyst, Vivek Arya, projects second-quarter revenue of $47 billion, surpassing both the consensus of $45.8 billion and NVIDIA's own guidance, driven primarily by the accelerating ramp of Blackwell GPUs and sustained, robust AI capital expenditures from hyperscalers. This optimism extends into the medium term, with fiscal 2026 pro forma EPS forecasted at $4.70–$4.80, well above the $4.38 consensus, and a fiscal 2027 earnings power target approaching $7 per share. This growth trajectory is supported by concrete capex increases from major clients like Meta, which has raised its 2026 spending forecast to $100 billion. Furthermore, gross margins are expected to expand to 73-74% by the third quarter, with a potential 200-300 basis point uplift from the sale of previously written-down H20 inventory. While the outlook is strong, the analysis also flags key risks, including near-term stock volatility, regulatory uncertainty surrounding H20 chip shipments to China, and the necessity of securing U.S. licenses for future chip generations to maintain a lead over competitors.

Key Decisions for Investors

• Given the analyst's expectation for a significant beat-and-raise quarter driven by fundamental AI demand, investors may consider the stock's near-term volatility a potential accumulation opportunity, aligning with the maintained Buy rating and $220 price target.
• Monitor upcoming earnings for management's commentary on gross margin trajectory and the specific mix between Blackwell and Blackwell Ultra, as these are key variables in the profitability outlook.
• Closely track US regulatory developments concerning H20 chip sales to China, as approval could unlock an incremental $6–$10 billion in revenue, while denial or delays would temper near-term growth forecasts.
• Investors should assess the capex guidance from hyperscalers like Meta, Google, and Microsoft in their respective earnings reports, as their spending directly fuels Nvidia's growth and validates the long-term thesis presented.