Nvidia Corporation (NASDAQ:NVDA) is back in the spotlight after announcing a landmark agreement with the U.S. government that allows it to resume chip sales in China, the world’s second-largest economy. Nvidia stock immediately reacted to the news, reflecting optimism among investors who see the move as a critical win for long-term growth. This deal follows President Donald Trump’s decision to issue an export license permitting Nvidia to sell its AI chips in China, albeit with a revenue-sharing arrangement.
Why This China Chip Deal Lifts Nvidia Stock Outlook
China is a critical market for Nvidia, having generated more than $17 billion in revenue for the company. The previous restrictions on chip sales to China posed a significant obstacle, threatening Nvidia’s growth and market dominance in artificial intelligence (AI) hardware.
The newly agreed-upon deal allows Nvidia to restore this vital revenue stream, with the U.S. government taking 15% of revenue from its H20 chip sales to China. While this means sharing a portion of revenue, the overall impact is viewed positively because it reduces geopolitical risks and secures access to a lucrative and rapidly expanding market.
Investors have responded favorably: Nvidia stock has surged over 110% from its year-to-date low in early April, reflecting renewed confidence in the company’s global growth prospects. This arrangement strengthens Nvidia’s foothold in AI, a sector where it remains a dominant player.
Analyst Upgrades Signal Strong Nvidia Stock Outlook
Wells Fargo’s senior analyst Aaron Rakers is particularly optimistic about Nvidia’s prospects following this deal. He forecasts that Nvidia can recapture the full quarterly revenue impact lost due to previous China restrictions by the fourth quarter of fiscal 2026 (January). This translates into a significant rebound in the company’s financial performance.
Rakers expects demand from China to grow well beyond the current $8 billion quarterly run rate, highlighting the enormous potential of this market. He reiterated his “Overweight” rating on Nvidia stock and raised his price target to $220, signaling an upside of more than 20% from current levels.
Wall Street Consensus Remains Bullish on Nvidia
Other major Wall Street firms also maintain a bullish stance on Nvidia shares for the remainder of 2025. The consensus rating on NVDA stock stands at “Strong Buy,” with some price targets climbing as high as $250. This suggests potential upside of approximately 37% from current prices, underlining broad optimism about Nvidia’s growth trajectory.
The bullish outlook is supported by Nvidia’s leadership in AI chip technology, strong revenue streams, and now the restored access to China’s large and fast-growing market.
What Investors Should Watch in Nvidia Stock Outlook
While the China deal significantly improves Nvidia’s outlook, investors should monitor:
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The pace at which Nvidia recaptures and grows its China revenue.
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Global geopolitical developments that could impact trade relations.
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Nvidia’s ability to maintain technological leadership in AI hardware.
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Competition in the semiconductor industry and emerging AI markets.
With these factors in mind, Nvidia remains a compelling stock for investors seeking exposure to the AI revolution and semiconductor sector growth.
Conclusion
Nvidia’s new China chip revenue deal is a major positive catalyst for NVDA stock outlook. By restoring access to one of its largest markets, the company mitigates geopolitical risks and unlocks billions in potential sales. Analysts, including those at Wells Fargo, have raised price targets and maintain bullish ratings, expecting Nvidia shares to rally further in 2025. For investors looking at AI and semiconductor growth, Nvidia (NASDAQ:NVDA) remains a top pick.
Featured Image: Megapixl
Author Stephanie Bédard-Châteauneuf 
