Nvidia (NASDAQ:NVDA) stock has been in focus this past week following news that the company, along with peer AMD, reached an agreement with the U.S. government to hand over 15% of its China-generated revenue in exchange for securing export licenses to the country.
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Piper Sandler’s Harsh Kumar, an analyst ranked in 13th spot amongst the thousands of Wall Street stock experts, sees the deal as a pivotal factor that could meaningfully shift demand patterns in the October quarter.
The reasoning stems from Nvidia’s recent China performance and expectations. The company reported about $7.1 billion in revenue from China in the April quarter – $4.6 billion realized in the partial quarter through April 9, with another $2.5 billion lost due to the export ban – and had estimated potential China revenue of up to $8 billion for the July quarter. Kumar believes the licensing process and supply channel reopening could stretch through August but, with the new 15% revenue-share deal in place, he anticipates the government will fast-track customer license approvals. Beyond October, the analyst forecasts that China’s demand could normalize to a growth pace of roughly 12–15% per quarter.
This outlook feeds directly into expectations for Nvidia’s imminent July quarter readout on August 27. Kumar is calling for revenue of about $45.1 billion, broadly in line with the company’s original guidance, while noting that Street estimates have nudged higher to around $45.7 billion. Given Nvidia’s track record of slightly exceeding forecasts and easing data center supply constraints, the analyst sees a realistic chance for modest upside.
The broader supply-demand picture reinforces this optimism. Kumar maintains that Nvidia is still in a “demand greater than supply” environment, a condition likely to persist through year-end. Even without China in the mix, U.S. HPC demand is outpacing Nvidia’s production capacity, a situation further complicated by changes to its rack-based models and GB200 launch delays. The pause in China shipments briefly relieved pressure, but Kumar expects the floodgates to reopen once licenses are issued, unleashing strong pent-up demand.
Adding to that, U.S. hyperscale spending is not just holding up but showing signs of accelerating. Based on recent capex updates from major hyperscalers, Kumar expects that as ongoing construction projects conclude, more budget will shift toward compute resources. In his view, the largest HPC players are in a multi-year race toward AGI capabilities and are committed to spending at that level for the foreseeable future.
Factoring in all these elements, a new high for Nvidia stock looks likely, as Kumar lifts his price target from $180 to $225 – signaling a potential 23% upside over the next year. His rating remains an Overweight (i.e., Buy). (To watch Kumar’s track record, click here)
There are plenty of other NVDA bulls on the Street – 35, in total – and the addition of 3 Holds and 1 Sell can’t detract from a Strong Buy consensus rating. However, the $189.23 average price target now only makes room for modest 12-month returns of 4%. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.