What is the China upside potential for Nvidia and AMD?

Investing.com -- Recent reports around a potential resumption of GPU sales to China have reopened the debate over how much upside U.S. chipmakers Nvidia and AMD could see if export approvals materialize.

According to Raymond James analyst Simon Leopold, assessing the exact outcome is challenging as several moving parts remain. But in an optimistic scenario, Leopold estimates AMD could generate roughly $500 million to $800 million in incremental revenue, translating into about $0.10 to $0.20 of non-GAAP EPS upside.

For Nvidia, the potential is materially larger, with an estimated $7 billion to $12.5 billion in additional revenue, or about $0.15 to $0.30 of non-GAAP EPS upside in 2026.

“Questions remain regarding whether the Chinese government will allow or discourage its cloud operators from purchasing advanced GPUs, as well as how the U.S. government’s export license fee will be accounted for,” Leopold wrote.

For AMD, market speculation has centered on China-compliant accelerator orders tied to Alibaba, with reports pointing to 40,000 to 50,000 MI308 units. At the midpoint, Leopold notes that “a $15,000 chip could equate to $675M in sales,” likely spread across multiple quarters.

However, uncertainty remains around approval timing, ramp linearity and whether China enforces restrictions on American AI semiconductors.

The required 15% payment to the U.S. government introduces accounting complexity around pricing and accounting.

While modest relative to AMD’s total revenue base, momentum could build as roadmap execution continues and China-compliant offerings gain traction, Leopold said.

Nvidia faces a similar dynamic, with speculation focused on a limited resumption of H200 GPU shipments to large Chinese hyperscalers and internet companies.

Even modest volumes could be meaningful, as “tens of thousands of units” at estimated average selling prices (ASPs) of $20,000 to $25,000, and up to roughly 350,000 to 500,000 units over time, could drive billions of dollars in incremental revenue.

Leopold stresses that China remains a relatively small part of Nvidia’s overall data center business, with growth primarily driven by U.S. hyperscalers, sovereign AI and enterprise customers as newer platforms ramp through 2026.

“We continue to view AI infrastructure as a multi-trilliondollar opportunity over the next decade, with Nvidia well positioned to sustain industry-leading growth, margins, and dominant share in data center accelerators, and we reiterate our Strong Buy rating,” he wrote.

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