NVIDIA's second-quarter earnings once again validated its central position in the AI wave. Despite uncertainties in the Chinese market, the company's fundamentals remain robust. Multiple Wall Street investment banks have unanimously raised their target prices, believing investors should ignore China market "noise" and focus on the massive growth opportunities brought by Blackwell and next-generation Rubin products.

NVIDIA's second-quarter revenue of $46.7 billion exceeded market expectations, with third-quarter guidance of $54 billion also surpassing forecasts. More importantly, this growth completely excludes contributions from the Chinese market, highlighting strong demand in other global markets. Bank of America Securities, Morgan Stanley, Citibank, and Goldman Sachs all maintain buy ratings with target price ranges of $200-235.

Investment banks unanimously believe that NVIDIA's position in the best investment opportunities for AI infrastructure construction is solid, with clear long-term growth prospects. Investors should focus on the company's core growth logic rather than short-term uncertainties.

**Strong Performance from Blackwell Product Line, Production Scale Rapidly Expanding**

All investment banks are optimistic about NVIDIA's strong performance in the Blackwell product line. Bank of America indicates that the Blackwell product line has reached full production capacity, producing approximately 1,000 racks per week, with annualized revenue capability of about $39 billion. As system-level racks gradually mature and achieve scale, gross margins are expected to recover more quickly to the previous mid-70% level.

Goldman Sachs states that the networking business Spectrum-X product line has achieved annualized revenue of $10 billion, significantly growing from the previous $8 billion. The next-generation Rubin products are scheduled to launch in mid-2026, providing strong momentum for future growth.

Additionally, analysts generally believe that NVIDIA maintains over 80% market share in rapidly growing global AI infrastructure construction, possesses industry-leading free cash flow margins above 45%, while valuation is only about 1x earnings growth rate, far below the 2x+ levels of tech peers.

**Financial Performance Exceeds Expectations, Guidance Optimistic**

NVIDIA's second-quarter revenue of $46.7 billion increased 6% sequentially and 56% year-over-year, exceeding market consensus expectations of $46.2 billion. Data center business revenue of $41.1 billion grew 5% sequentially and 56% year-over-year. Gaming business performed strongly with revenue of $4.3 billion, up 14% sequentially and 49% year-over-year, exceeding market expectations of $3.9 billion by 11%.

Earnings per share of $1.05 increased 30% sequentially and 54% year-over-year, beating market expectations of $1.01 by 4%. Gross margin of 72.7% exceeded expectations, but after excluding the 40 basis points contribution from H20 inventory sales, adjusted gross margin of 72.3% was in line with expectations.

Third-quarter revenue guidance of $54 billion represents 16% sequential growth and 54% year-over-year growth, exceeding market expectations of $53.5 billion. Gross margin guidance of 73.5% surpassed Bank of America's expectation of 73.0%. This marks the first time a company has guided for $7 billion in quarterly revenue growth, and this growth completely excludes contributions from the Chinese market.

**Blackwell Product Line Fully Deployed, Production Scale Rapidly Increasing**

All investment banks are optimistic about NVIDIA's strong performance in the Blackwell product line. Bank of America points out that the Blackwell Ultra platform has achieved full production operation, producing approximately 1,000 racks per week. At $3 million per rack, this can achieve approximately $39 billion in sales within 13 weeks. As system-level racks gradually mature and achieve scale, gross margins are expected to recover more quickly to the previous mid-70% level.

Morgan Stanley analysts indicate that second-quarter Blackwell revenue increased 17% sequentially, with management expressing optimism about Blackwell Ultra production progress and exceptionally strong demand. Citibank estimates that approximately $2.8 billion in Blackwell sales implies about 900,000 units, up from the estimated 700,000 units last quarter.

Goldman Sachs maintains a buy rating, noting that Blackwell will occupy the majority share of GPU shipments in 2025 and 2026. The firm expects Blackwell's share to increase from approximately 61% in 2025 to 87% in 2026, while next-generation Rubin products will begin mass production in mid-2026.

Related networking products also continue to benefit, with networking business achieving significant growth of 46% sequentially and 98% year-over-year, reaching $7.3 billion in revenue. The Spectrum-X product line has achieved annualized revenue of $10 billion, significantly growing from $8 billion in April.

**Next-Generation Rubin Products Progressing on Schedule, 2026 Growth Expected**

NVIDIA's product innovation pace remains unabated. Goldman Sachs points out that next-generation Rubin products are scheduled to launch in mid-2026, continuing to maintain a 0.5-1 year hardware advantage over AMD GPU products. The Rubin platform remains on schedule for mid-2026 launch, with all six chips comprising the platform having begun trial production.

Management expresses optimism about Rubin's improvements over Blackwell in workload performance, efficiency, and cost-effectiveness, providing strong support for 2026 growth. Goldman Sachs expects 2026 earnings per share to be approximately 10% higher than market expectations.

Sovereign customers are expected to contribute over $20 billion in revenue in 2025, more than doubling year-over-year, indicating that Blackwell adoption is expanding from traditional hyperscale customers to non-traditional customer groups including sovereign clients.

All investment banks unanimously believe that NVIDIA's position in the best investment opportunities for AI infrastructure construction is solid, with clear long-term growth prospects. Investors should focus on the company's core growth logic rather than short-term uncertainties.

**China Market Risks Controllable, Long-term Growth Logic Unchanged**

NVIDIA's second-quarter performance basically met expectations, with top Wall Street investment banks raising target prices to $210-235, focusing on the company's dominant position in global AI infrastructure construction and long-term profitability. Investment bank analysts suggest investors ignore short-term China market disruptions and focus on the company's massive growth potential of reaching $10 per share earnings by 2027.

Despite uncertainties in the Chinese market, analysts completely excluded Chinese market contributions in their forecasts. China's share in data center revenue has dropped to single-digit percentages, with management confirming no H20 product shipments to China in the second quarter, and third-quarter guidance also excludes Chinese business contributions.

Once H20 products begin shipping, previously written-down inventory can be reused, potentially boosting gross margins by 200-300 basis points. H20 products are expected to potentially achieve $2-5 billion in revenue in the third quarter if uncertainty issues are alleviated. Even using the low end of management's mentioned $2-5 billion H20 chip shipment estimate could push guidance up to $56 billion.

Expected sales growth of approximately $200 billion in non-China regions for fiscal 2026 will fully offset uncertainty headwinds. Singapore accounts for 22%, but over 99% of data center computing revenue actually comes from U.S. customers.

**Valuation Advantage Clear, Target Prices Universally Raised**

NVIDIA's price-to-earnings growth ratio is only 0.9x, while the average for non-NVIDIA tech giants is 3.9x, despite NVIDIA having superior free cash flow margins above 50%, far exceeding other companies' levels below 20%. At the current stock price of $181.60, the company's valuation is only 26.5x fiscal 2027 non-GAAP earnings per share.

Bank of America Securities raised its target price from $220 to $235, raising fiscal 2026/27/28 earnings per share expectations by 6%/7%/11% to $4.45/$6.26/$8.03 respectively.

Morgan Stanley raised its target price from $206 to $210, maintaining a 33x P/E valuation methodology.

Citibank raised its target price from $190 to $210, based on 30x P/E valuation of approximately $7 earnings per share for fiscal 2026.

Goldman Sachs maintains a buy rating with an unchanged target price of $200.

NVIDIA expects AI infrastructure spending to reach $3-4 trillion by the end of this decade, higher than the previous forecast of $2.3 trillion for 2029. Based on the total addressable market outlook of over 40% for AI accelerators, NVIDIA's accelerator market share is approximately 60%, with upside potential in accelerator sales.