Is Nvidia’s $5 trillion milestone within reach or already priced in?

Nvidia reported Q2 revenue of $46.7 billion and adjusted earnings per share of $1.05, both ahead of expectations. The company projected Q3 revenue of $54 billion, also above consensus. Yet the stock fell more than 3% in after-hours trading, reflecting investor concern that at a $4.3 trillion market cap, growth may already be priced in. With China sales still absent, the question is whether Nvidia has the momentum to reach a $5 trillion valuation, or if expectations have run ahead of reality.

Key takeaways

• Revenue of $46.7B and EPS of $1.05, both beating estimates.
  

• Data centre revenue $41.1B, slightly below forecasts, with sales down 1% sequentially after a $4B drop in H20 processors.
  

• No H20 sales to China, though $180M in inventory was released to a non-China customer.
  

• Guidance of $54B ±2% for Q3, excluding potential China shipments.
  

• Net income of $26.4B, up 59% year on year.
  

• $60B share buyback programme approved, with $9.7B repurchased in Q2.
  

• Stock fell more than 3% after the results, despite headline beats.
  
  

The China question

The missing piece in Nvidia’s results is China. The company reported no H20 processor sales into the region, despite the chip being designed to comply with U.S. restrictions. Analysts estimate that shipments could add between $2 and $5 billion in quarterly revenue, or a 4–10% boost to the top line.

Geopolitics remain the stumbling block. The Trump administration banned sales in April, reversed the ban in July, and then imposed a 15% fee on China sales in August. Trump has also threatened a 100% tariff on semiconductors not made in the U.S., though Nvidia is expected to be exempt. Beijing has meanwhile urged domestic companies to avoid Nvidia chips on security grounds. 

Nvidia denies these claims but has had to take a $4.5 billion writedown on H20 inventory. Management noted that the chip could have added $8 billion in second-quarter sales if cleared for shipment. CFO Colette Kress has said Nvidia could ship between $2 and $5 billion worth of H20 processors in the current quarter, depending on approvals.

This makes China both the company’s largest untapped growth driver and its biggest external risk.

Data centre strength and Blackwell ramp

Nvidia’s data centre business grew 56% year on year to $41.1 billion, but missed consensus by a small margin. 

Source: Appeconomyinsights.com

Compute revenue was $33.8 billion, down 1% sequentially, while networking sales nearly doubled from a year ago to $7.3 billion.

The highlight was the rapid ramp-up of Blackwell chips. CEO Jensen Huang said production is “ramping at full speed” and demand is “extraordinary.” Blackwell already represents about 70% of data centre sales and grew 17% quarter on quarter. With Amazon, Microsoft, Alphabet, and Meta responsible for roughly half of Nvidia’s data centre revenue, hyperscaler adoption of Blackwell confirms Nvidia’s central role in the AI buildout.

Other business lines

Gaming revenue rose 49% to $4.3 billion, driven by GPUs designed to run OpenAI models on PCs. Robotics sales increased 69% to $586 million, though the division remains small. Nvidia also reinforced shareholder returns with a $60 billion buyback programme, repurchasing $9.7 billion worth of shares in Q2.

Valuation and growth pressures

Despite nine consecutive quarters of revenue growth above 50%, this quarter marked Nvidia’s slowest expansion since early 2024. 

Source: Stock analysis

With a $4.3 trillion valuation, the market is pricing in flawless execution. Even a $200 million shortfall in data centre revenue was enough to trigger selling. The $5 trillion milestone is within sight, but whether the stock can climb further depends less on beating consensus and more on adding fresh catalysts - with China at the top of the list.

Price action scenarios

• Bull case: China approvals allow H20 sales, which will add $2-5B per quarter and push Nvidia closer to $5T.
  

• Bear case: Valuation concerns and slowing growth keep the stock under pressure.
  

• Neutral case: Shares consolidate as investors await clarity on China and regulatory policy.

Nvidia technical analysis

At the time of writing, the stock price is almost touching a resistance level, hinting at a potential drawdown. Volume bars showing dominant sell pressure with little pushback from buyers - adds to the bearish narrative. Should the drawdown materialise, prices could tumble towards the $172.75 support level. If we see a surprising crash, prices could be held further down at the $142.00 support level. Resistance holds at the $182.54 price level.

Source: Deriv MT5

Investment outlook

Nvidia remains the leader in AI infrastructure, with Blackwell powering cloud expansion and gaming rebounding strongly. But with valuations stretched and growth moderating, the stock’s path to $5 trillion depends heavily on geopolitics. China could provide the next catalyst - or keep the milestone just out of reach.

Frequently asked questions

Is Nvidia’s $5 trillion valuation already priced in?

Much of it is. Investor reactions show the stock is priced for near-perfection, with little margin for error.

Why did the stock fall after strong results?

Data centre revenue missed estimates, growth slowed, and no China sales were included in the quarter.

What role does China play in Nvidia’s future growth?

China could add $2–5 billion in sales per quarter, making it the key swing factor for Nvidia’s valuation trajectory.

How important is Blackwell to Nvidia’s future?

Blackwell is already 70% of data centre revenue and rising quickly, but the scale of China’s potential contribution remains unmatched.

Disclaimer:

The information contained within this article is for educational purposes only and is not intended as financial or investment advice. We recommend you do your own research before making any trading decisions.

This information is considered accurate and correct at the date of publication. Changes in circumstances after the time of publication may impact the accuracy of the information.

The performance figures quoted are not a guarantee of future performance.