Deepwater’s Munster sees Nvidia stock upside from China sales

Investing.com - Nvidia (NASDAQ:NVDA) received U.S. approval this week to sell H200 GPUs to roughly 10 Chinese firms, including Alibaba, Tencent, and ByteDance. The approval creates potential for 3-5% revenue upside in calendar year 2027, with a best-case scenario of 10% added to CY27 estimates, Gene Munster of Deepwater Asset Management said.

The approval does not affect Nvidia’s May 20 earnings report since the update fell into the July quarter, Munster noted. He expects the company will not include China revenue in its July guidance given unpredictability, but may suggest it could add 1-2% to sales in the July quarter. Munster cautioned that approval does not equate to revenue, noting that Nvidia’s H20 has been approved in China for months but the Chinese government has told companies not to purchase them and favor domestic GPUs.

Nvidia’s non-China business grew 89% in the January 2026 quarter and is estimated to grow 100% in April 2026, with actual results likely closer to 110% year-over-year growth, Munster said. Street estimates for the April quarter expect 79% revenue growth, which adjusts to 100% when removing China revenue from April of last year.

At the March 16 GTC keynote, CEO Jensen Huang projected at least $1 trillion in cumulative data center revenue through 2027, driven primarily by Blackwell and Vera Rubin and, to a lesser extent, networking systems. Huang said demand could push the final figure higher.

If Nvidia captured 30% share in China, the best case would generate around $23 billion in revenue, adding 6% to Street estimates of $370 billion for CY26, Munster said. He estimated the AI GPU total addressable market at $75 billion this year, up from $50 billion last year.

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