Nvidia's H200 opening in China draws analyst caution ahead of the August 26 print
In focus for $NVDA (Nvidia Corporation): ByteDance and Tencent (TCEHY) have reportedly begun receiving Nvidia H200 AI chips, a reopening in a market where Nvidia's more advanced hardware remains restricted. Wedbush…
Key takeaways
- ByteDance and Tencent have reportedly begun receiving Nvidia H200 AI chips, reopening a market where Nvidia's more advanced hardware remains restricted.
- Nvidia's approximately $91 billion second-quarter guidance, above Wall Street's $86.11 billion estimate, assumes zero Data Center compute revenue from China.
- Fiscal 2027 first-quarter revenue was $81.62 billion, up 85% year over year, with adjusted EPS of $1.87 beating the $1.77 estimate.
- Wedbush analyst Matt Bryson called the China revenue benefit "minimal" for the foreseeable future, citing structural limits like case-by-case regulatory clearance and Hong Kong capacity constraints.
- Of 48 analysts covering NVDA, 44 rate it "Strong Buy," with an average price target of $306.22 implying 46.2% upside.
In focus for $NVDA (Nvidia Corporation): ByteDance and Tencent (TCEHY) have reportedly begun receiving Nvidia H200 AI chips, a reopening in a market where Nvidia's more advanced hardware remains restricted. Wedbush analyst Matt Bryson characterized the revenue benefit as "minimal" for the foreseeable future, and Nvidia's own second-quarter guidance already assumes zero Data Center compute revenue from China. The next read is the fiscal 2027 second-quarter earnings report on August 26, after the close.
The H200 opening arrives with structural limits. Beijing wants most chips to stay outside mainland China, and every purchase still requires case-by-case regulatory clearance. Companies can deploy the hardware in Hong Kong, but limited data center capacity and power constraints make large-scale rollouts difficult. Nvidia holds roughly 500,000 H200 chips in stock largely intended for Chinese customers; moving them at any real volume remains the binding constraint. China once contributed more than 20% of Nvidia's data center revenue before export restrictions and domestic alternatives eroded that share.
What the guidance and the numbers say
The more telling signal is what Nvidia embedded in its forward outlook. The company's second-quarter revenue guidance of approximately $91 billion, ahead of Wall Street's $86.11 billion estimate, was constructed with no contribution from Chinese data center compute. That either reflects confidence in the rest-of-world demand environment or signals the China reopening is, in practice, marginal for the near term.
The Q1 results provide the baseline. Fiscal 2027 first-quarter revenue was $81.62 billion, up 85% year over year and above the $78.84 billion consensus. Adjusted earnings per share of $1.87 beat the $1.77 estimate. Data Center generated $75.2 billion of the total, growing 92% year over year, while Edge Computing added $6.4 billion, a 29% gain. GAAP gross margin held at 74.9%, up from 60.5% a year earlier. Nvidia returned approximately $20 billion to shareholders through buybacks and dividends during the quarter, with gross margin guidance kept near 75% for the period ahead.
Wall Street's positioning on NVDA sits firmly on the crowded side. Of 48 analysts covering the stock, 44 hold a "Strong Buy," three a "Moderate Buy," and one a "Strong Sell." The average price target is $306.22, implying 46.2% upside, with the Street-high at $500. NVDA is up 17.9% over the past year and 12.5% in 2026, compared with the S&P 500's 18.5% and 11.9% respectively. The all-time high of $236.54 was reached on May 14.
The August 26 print will show whether the $91 billion guide holds with China data center revenue still effectively zeroed out of the model.