Despite uncertainties surrounding H20 chip sales in the Chinese market, NVIDIA's (NVDA.US) earnings report and forward guidance have sent a clear message to investors: the artificial intelligence spending boom continues to accelerate.

Morgan Stanley analyst Joseph Moore wrote in a client note that "market sentiment has turned more optimistic, and the company continues to clear higher hurdles." He noted that "consensus expectations were $50 billion just weeks ago with digestion concerns, but have now risen to $53 billion (including some China expectations not reflected in guidance). This $7 billion incremental revenue guidance excluding the China market - setting a record for corporate quarterly dollar revenue growth - was achieved in just one quarter. Based on management's conference call statements and our ongoing verification, this still represents genuine demand that remains unmet. The continued strength of the Hopper architecture confirms this, as computing shortages are so severe that customers are still purchasing three-year-old Hopper products to meet some of their needs."

Moore added that the China business outlook is "difficult to predict," with NVIDIA management taking a cautious stance during the earnings call. However, he pointed out that the $5.4 billion October quarter revenue guidance validates genuine AI demand. Moore maintains a "Buy" rating on NVIDIA and slightly adjusted his target price from $205 to $210 following the earnings report.

Jefferies analyst Brian Curtis was equally enthusiastic, highlighting that demand for Hopper and Blackwell architectures remains "rock solid." "The broader demand outlook remains robust: GPU investments of $3 million can now generate returns of $30 million in token revenue, hyperscale enterprise capital expenditure is accelerating, and sovereign AI is expected to contribute $20 billion in revenue this year," Curtis wrote in his report. "The entire Hopper and Blackwell product lines continue to sell out, with even non-restricted customers purchasing H20 chips. As the China situation gradually resolves, there remains ample room for growth in computing and networking businesses." He maintains a "Buy" rating and raised his target price from $200 to $205.

Wedbush Securities analyst Dan Ives believes this earnings report and guidance further enhances NVIDIA's position. "As AI infrastructure investment continues to grow (the company expects total scale to reach $3-4 trillion by 2030), the chip sector remains NVIDIA's domain, with other players only able to pay 'rent' - more sovereign entities and enterprises are queuing for the world's most advanced chips," he wrote in his report.

A Stone Fox Capital portfolio manager noted that even at 25 times earnings for fiscal 2028, the stock remains "cheap," "considering the renewed outperformance, raised guidance, and upside potential from future inclusion of China chip sales."