Nvidia’s stock may have closed Friday at €171.98, up 1.09% on the day, but behind that modest gain lie two strategic shifts reshaping the company. One is a retreat: Chief Executive Jensen Huang has effectively conceded China’s AI chip market to Huawei. The other is a reinvention: Nvidia is quietly morphing into a financier of its own hardware, launching a lending model that trades one-time GPU sales for recurring cloud revenue. Together, these moves paint a picture of a company adapting to a fragmented world.
Huang’s comments on China were unusually blunt. Nvidia has “largely ceded” the market for AI chips to local rival Huawei, which he described as “extremely strong.” Political hurdles now make a revival unlikely. Even after the Trump administration in December authorized exports of the advanced H200 chip to China — with a 25% revenue-sharing clause — deals remain stalled. Security concerns on both sides have frozen the pipeline. Huang told investors to expect “nothing” in terms of new approvals, and chip export controls were absent from the agenda at the latest US-China talks. The 200-day moving average of €164.21 now serves as a key support level, with the stock trading 5.17% below its 50-day average of €181.36.
While stepping back in China, Nvidia is stepping forward into a novel business line. Under finance chief Colette Kress, the company has created a program called “AI Compute Partnership.” It helps so-called neocloud providers buy expensive high-end chips, taking a slice of the rental income in return. Two partners have already signed on: Australia’s Sharon AI, which committed to a six-year deal for up to 40,000 Grace-Blackwell GB300 chips, and Indonesia’s Firmus, which is building a 360-megawatt campus in Batam capable of housing up to 170,000 Nvidia chips. The model converts one-off sales into recurring revenue and lowers the entry barrier for smaller AI infrastructure builders.
Management is also getting a refresh. Nicholas Parker joins as Executive Vice President of worldwide sales, effective immediately. He will succeed Ajay K. Puri, who plans to retire on August 24, 2026. On the product side, Nvidia is expanding its “Physical AI” footprint. A strategic investment in Verkada targets AI-powered video analytics for buildings — search accuracy has already improved thanks to Nvidia’s computing power. Meanwhile, the new “Nvidia Halos” safety system for robotics has signed early adopters such as Agility Robotics, which deploys humanoid robots at facilities run by Amazon and GXO.
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Operationally, the company remains on a tear. First-quarter revenue for fiscal 2027 hit $81.6 billion, up 85% year over year. The data-center segment alone brought in $75.2 billion, a 92% jump. Management guided for around $91 billion in the current quarter. Analysts see the China retreat as manageable: the average price target stands at €263.59, and the stock has gained roughly 27% over the past twelve months.
That bullishness exists alongside a surprisingly low valuation. Nvidia trades at a forward price-to-earnings ratio of about 22, cheaper than Coca-Cola’s 26. Year to date, the shares have risen just 6.75%, underperforming the S&P 500. Rising bond yields — the 10-year US Treasury recently hit 4.6%, with inflation expectations between 4% and 6% — are compressing multiples across the semiconductor space. The 14-day relative strength index sits at 43.8, squarely in neutral territory.
The broader landscape is shifting as well. AMD is hosting its “Advancing AI” event in San Francisco on July 22–23, which could sway sentiment across the sector. More fundamentally, the world market for AI chips is no longer a single pool. Regional ecosystems are forming, with China building its own and Nvidia protecting margins elsewhere. For investors, the focus now turns to whether data-center customers outside China can absorb the capacity that would have gone to Beijing. That question may define Nvidia’s next chapter.
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