Nvidia received U.S. authorization this week to export H200 graphics processing units to about 10 Chinese customers, among them Alibaba, Tencent, and ByteDance. Gene Munster of Deepwater Asset Management said the decision creates the potential for incremental revenue in calendar year 2027, estimating a 3-5% upside under typical assumptions and a best-case lift of as much as 10% to CY27 estimates.
Munster noted the timing of the clearance means it will not alter Nvidia's May 20 earnings report because the approval falls into the company’s July fiscal quarter. Given the unpredictability around Chinese demand and government guidance, he expects Nvidia to avoid including China-derived sales in its July guidance. That said, Nvidia might indicate that China could contribute roughly 1-2% to sales in the July quarter, according to Munster.
Munster emphasized a key caveat: export approval is not synonymous with immediate or guaranteed revenue. He pointed to the earlier approval of the H20 in China, where companies were told not to buy the units and where the government has signaled a preference for domestic GPU suppliers. That precedent, he said, underscores the difference between regulatory clearance and actual purchasing activity.
Separating Nvidia’s business into China and non-China components, Munster highlighted the company’s robust growth outside of China. He reported that Nvidia’s non-China revenue expanded by 89% in the January 2026 quarter and is estimated to rise 100% in the April 2026 quarter, with actual year-over-year growth likely nearer to 110% according to his view. By contrast, Wall Street consensus for the April quarter stands at 79% revenue growth; Munster points out that removing last April’s China revenue from the comparison increases the adjusted growth rate to 100%.
At the March 16 GTC keynote, Nvidia’s CEO projected at least $1 trillion in cumulative data center revenue through 2027, driven mainly by new GPU architectures Blackwell and Vera Rubin and, to a lesser extent, networking systems. Management suggested demand could push that cumulative figure even higher.
Munster also modeled a China market share scenario: if Nvidia were to capture 30% share in China, that outcome would produce roughly $23 billion in revenue, which he said would add about 6% to consensus Street estimates of $370 billion for calendar year 2026. He estimated the total addressable market for AI GPUs at $75 billion this year, up from $50 billion last year.
Sectors affected: Semiconductors and data center infrastructure suppliers, cloud and internet platforms operating in China, and related hardware supply chains.