Nvidia has pegged its China revenue potential at about $50 billion a year. And with a new report suggesting the company might actually be able to start selling in that market once again, the stock is rising.

But Nvidia's (NVDA) 1.4% stock gain in Friday morning action doesn't quite match up with the size of the opportunity in China. That partly reflects that the situation is so volatile. Nvidia and China have had an on-again-off-again relationship, and, while Bloomberg reports that China's government has given big companies the go-ahead to buy Nvidia chips, there's no guarantee that the business is safe from future geopolitical risk.

"Few will assume steady and reliable China [revenue] going forward," Mizuho trading-desk analyst Jordan Klein said in a note to clients. Rather, China is more of a "free call option" for investors, he added.

But, actually, a "large majority" of investors Klein speaks with have told him they would prefer Nvidia not win approval to sell its H200 chips in China because permissions from Beijing "could get revoked at any point in time," complicating the process of modeling Nvidia's business.

Further, the Bloomberg report added a key caveat: that Beijing will encourage Chinese companies to buy domestic chips, as well. The Chinese government has been putting its support behind homegrown semiconductor and artificial-intelligence players in order to reduce its dependence on the U.S. and improve its own positioning.

The country "is going as fast as it possibly can towards technological independence," Richard Windsor, an independent analyst with Radio Free Mobile, wrote in a note earlier this week.

On the chip front, Windsor is doubtful that China will achieve its goals. "China is behind," he wrote, and "there is little scope for it to catch up, given that it will not be able to make cutting-edge hardware in China."

Meanwhile, Nvidia only recently got permission from the U.S. government, on a case-by-case basis, to sell the powerful H200 chip, which is useful for artificial-intelligence applications, to Chinese customers.