Nvidia's Network Boom Masks a China Void: Earnings Test Looms as Market Share Hits Zero
Veröffentlicht: 16.05.2026 um 11:12 Uhr, Redaktion boerse-global.de
The narrative around Nvidia has rarely been more split. One story is about an explosion in networking revenue, a PEG ratio that still looks reasonable, and cloud giants spending hundreds of billions. The other is about a complete collapse in China — a market that once contributed nearly $20 billion in annual sales and now sits at zero. On May 20, when the chipmaker reports quarterly results, investors will need to reconcile both.
The stock closed in Frankfurt on Friday at €193.90, down 3.56 percent — a pullback from the day before, when it hit a fresh high of €201.05. Profit-taking, not a trend break, is the read from most chart watchers. The RSI of 57.3 signals no overheating, and the gap to the 200-day moving average stands at 21.93 percent. But the next leg higher will need fresh ammunition.
The Networking Surprise
The strongest impulse is coming from an area outside the core chip business: data-center networking. In the final quarter of fiscal 2026, Nvidia’s network revenue hit $10.98 billion — a 263 percent jump year-on-year. The driver is NVLink, the technology that stitches together graphics processors inside tightly packed Blackwell systems, particularly the GB200 and GB300 server racks.
CEO Jensen Huang has called “Grace Blackwell with NVLink” the industry standard for AI inference. Major customers including Meta, Amazon Web Services, and CoreWeave are leaning on that network technology as they build out their data centers.
Should investors sell immediately? Or is it worth buying Nvidia?
Valuation Still Passes the Sniff Test
At first glance, Nvidia looks expensive after its long rally. But the growth metrics tell a different story. The forward price-to-earnings ratio sits at 27, while the PEG ratio — which factors in expected earnings growth — is about 0.68. A PEG below 1 often suggests the market is not fully pricing in future expansion. Free cash flow for the last fiscal year came in at $96.58 billion.
For context, both AMD and Intel trade at higher earnings multiples despite far slower growth rates. That gap keeps Nvidia attractive to institutional investors.
Analysts have been raising targets ahead of the report. TD Cowen kept a “Strong Buy” rating and lifted its price objective to $275 from $235. Cantor Fitzgerald went further to $350 from $300. Both point to the next wave of agent-based AI applications as the catalyst.
Nvidia also has $58.5 billion remaining under its existing buyback authorization. That is not a new announcement or a commitment to deploy it, but it underscores the financial flexibility the company still commands.
The China Implosion
On the other side of the ledger, Nvidia’s position in China has unraveled. Huang bluntly stated on April 30 that while the company once held over 90 percent global market share, that figure has fallen to zero in China — referring to direct sales to mainland companies, excluding gray market activity.
The U.S. government has allowed companies like Alibaba and Tencent to buy Nvidia’s H200 processors, but those chips have not yet been delivered. U.S. Commerce Secretary Howard Lutnick has pinned the blame on Beijing’s industrial policy, saying China wants to steer investment toward domestic chip production. Tencent is indeed increasing its use of local chips, and Alibaba is expanding deployment of its own semiconductors. Even if export rules were loosened, it would not automatically restore sales.
The numbers are stark. In the most recent fiscal year, Nvidia generated $19.67 billion in revenue from China including Hong Kong. For the first quarter of fiscal 2027, the company is planning for zero revenue from the region. Local rival Huawei plans to double production of its Ascend 910C chip to 600,000 units this year, having already captured about 41 percent of the AI accelerator server market in China last year.
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A $170 Billion Swing and the Earnings Stage
The China problem hit home on May 15, one day after Nvidia’s stock closed at a record $235.74 in the U.S. The shares lost more than 4.6 percent the next day, wiping out roughly $170 billion in market capitalization. That was the biggest single-day value destruction since the DeepSeek scare in January. On the week, the Frankfurt listing still ended up 6.18 percent.
Now all eyes are on Wednesday’s report. Management has guided for revenue of approximately $78 billion, with a 2 percent variance band. The consensus is a touch higher at $78.8 billion, with adjusted earnings per share of $1.77.
Three things will dominate the post-earnings discussion: the speed of the Blackwell ramp, margin stability, and how much China — despite the political barriers — might still contribute through indirect channels or a future policy shift. The networking revenue, already running at a $44 billion annualized pace, will be the key validation that the AI buildout is deepening rather than just widening.
Nvidia’s next major product platform, Vera Rubin, is also on the horizon for new training and inference workloads. But for now, the immediate test is whether the company can show a clean production ramp and a coherent answer to the China void. The network numbers have been the strongest argument so far. On Wednesday, they’ll need to carry the weight again.
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