Nvidia(US:NVDA) Sou Hu Cai Jing·2025-10-27 01:24Core Insights - NVIDIA's market share in China has dropped from 95% to 0% due to U.S. export controls, yet its market valuation remains unaffected, indicating investor confidence in its overall business model and growth potential [1][3][4]. Market Dynamics - NVIDIA's CEO Jensen Huang highlighted the emergence of two AI markets: "agent-based AI" and "physical AI," which could represent a combined global economic scale of approximately $100 trillion [1]. - The company has completely exited the Chinese market, which Huang describes as a significant loss for the U.S., as it has lost one of the largest markets globally [3][4]. Financial Performance - As of October 18, 2025, NVIDIA's market capitalization is approximately $4.56 trillion, making it the highest-valued tech company globally, despite having no business in China [7]. - In the second quarter of fiscal year 2026, NVIDIA reported revenue of $46.7 billion, with only $2.769 billion coming from the Chinese market, reflecting a 56% year-over-year growth [8]. Competitive Position - NVIDIA's dominance is attributed to its data center business, which generated $41.1 billion in revenue (88% of total revenue) in the second quarter of fiscal year 2025, showcasing a 56% year-over-year increase [8]. - The company has a strong technological moat, with over 500,000 CUDA developers and advanced GPU architectures, making it difficult for competitors to penetrate its market [8]. Growth Potential - NVIDIA's gross margin stands at 72.4%, allowing it to maintain strong growth even without the Chinese market [11]. - The company is expected to continue benefiting from the AI demand, with growth rates exceeding 50%, contrasting with lower growth rates from competitors like Microsoft and Apple [11]. Market Sentiment - Investors remain focused on NVIDIA's robust growth capabilities and the increasing demand for AI technologies, despite the potential risks associated with market fluctuations and valuation bubbles [9][12].