The A.I. Gold Rush Starts Now (From Lear Capital)
NVDA Greenlight: China H20 Sales Spark 50% Rally Potential 
NVIDIA’s (NASDAQ: NVDA) market received a green light to rally that will have far-reaching repercussions. NVIDIA is the largest company globally, with a valuation exceeding $4 trillion, and has the most significant impact on the S&P 500 index. A rally to new highs supported by sales to China will carry over into adjacent markets, strengthening the broad market rally and driving the index to new highs as well. The NVIDIA news? NVIDIA CEO Jensen Huang revealed the U.S. government’s assurance that the licenses to sell H20 and compliant semiconductor products to China would be granted. He says deliveries should start soon. What do sales of H20 mean for NVIDIA? Two things. The first is that inventory written off in the first half can be re-recognized, sold, and converted to cash. The second is that sales to China were estimated at $15 billion, worth 750 basis points (bps) in revenue relative to the F2026 consensus estimate and a comparable increase in earnings. The company reported a 56% adjusted net profit margin in 2025, which could impact forward earnings of approximately $8.5 billion, or roughly 4.5% of the F2026 revenue forecast. NVIDIA Moves to New Highs, Another 50% Gain is Possible The initial market reaction is favorable and confirms the outlook for an additional 30% to 50% upside. The early market response resulted in a 5% increase, which took it to a new all-time high, extending the break that had begun three weeks prior. The move confirms the near-term and long-term trends, bringing targets in the $210 to $250 range, aligning with the analysts’ sentiment and price target forecasts. 
The analysts' trends ahead of the news release were positive and will likely strengthen in its aftermath. They include steady coverage with MarketBeat tracking 42 with current ratings, firming sentiment pegged high in the Moderate Buy range, and a rising consensus price target. The consensus forecasts only marginal upside in mid-July, but the revision trend leads to the recently set high-end of $250. The most recent revisions position this stock in the $200 to $250 range, representing a 50% increase at the high end, which aligns with the technical targets. The initial analyst response is from Wedbush. Lead analyst Dan Ives called it a watershed moment for NVIDIA, CEO Jensen Huang, and the U.S. position in the AI revolution. He made note of recent visits by Huang with President Trump and NVIDIA’s position as a bargaining chip in trade negotiations. "...this is a huge win for tech stocks and investors will recognize this morning how important this H20 statement was from Nvidia,” said Ives in his note to investors. A Catalyst in NVIDIA’s Q2 Earnings Report NVIDIA is scheduled to report Q2 earnings on August 27 and will provide a catalyst for the market. The bad news is that growth will slow. The good news is that growth will slow to a solid 50% YOY following two years of triple-digit gains, the company will likely outperform its expectations, and the margin of error could be substantial. The margin of error could be significant due to the negative trend in revisions. More than 90% of the 34 revisions tracked by MarketBeat since the Q1 report include reduced expectations for revenue and earnings despite obvious momentum within the broad AI industry. More importantly, with China back on the table, the guidance is likely to be impressive and spur an increased appetite for the stock. The chart raises a red flag that investors should consider. The trading volume has trended downward since March 2024, indicating a weakening of the market. However, institutional activity remains robust with them buying on balance in Q1, Q2, and the first half of July, providing a solid support base and market tailwind. A solid Q2 report and guidance may trigger another inflow of retail trading volume. Written by Thomas Hughes Read this article online › Read More: 
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