Earlier this month, Nvidia (NVDA) CEO Jensen Huang reported that the company does not expect Beijing to officially determine how many of the company's H200 chips are allowed into the country. Instead, individual “purchase orders” will determine the amount of revenue that Nvidia can obtain from China, the CEO stated.
Huang's statement suggests that Nvidia itself is unsure about how many H200 chips it can sell in the world's second-largest economy. This element of uncertainty, combined with the potential of meaningfully increased competition facing Nvidia, makes the stock one to hold at this point.
About NVDA Stock
Nvidia is the world's runaway leader when it comes to developing chips used to enable artificial intelligence (AI). Among its largest customers are the huge hyperscalers, including Alphabet (GOOG) (GOOGL), Amazon (AMZN), Meta (META), and Microsoft (MSFT).
In the third quarter, the chipmaker's revenue surged to $57 billion, a 22% increase versus the same period a year earlier. Meanwhile, its net income advanced 21% year-over-year to $31.9 billion. In the 12 months that ended on Jan. 13, NVDA stock climbed 40%. However, in the three months that ended on the same day, the stock was down 2.3%.
Nvidia shares change hands at a forward price-to-earnings (P/E) ratio of 41.7x. Analysts on average expect NVDA's earnings per share (EPS) to rise 51% this year and 57% next year.
More Signs of Uncertainty in China
On Jan. 6, Nvidia CFO Colette Kress said that Nvidia had officially sought approval to sell its H200 chips in China, but she added that Beijing had still not made a decision about the company's application. Further, while Nvidia has estimated that it will generate revenue of $500 billion in 2026 from its Blackwell chips and its upcoming Vera Rubin semiconductors, it has not provided an estimate of how much revenue it will obtain from China in 2026.
Adding to the lack of clarity, China reportedly ordered a number of companies recently to postpone ordering chips from Nvidia. Finally, the 15% tax that the Trump administration has levied on the chip giant's exports to China will likely weigh meaningfully on the firm's profit margins.
Increased Competition Could Impact NVDA Stock
As the Wall Street Journal reported on Dec. 5, 2025, the chipmaker is facing increased challenges, partly from its own customers, including Alphabet, Amazon, and Microsoft, all of which are making their own AI chips. These hyperscalers are reportedly looking to boost their margins in order to assuage their investors, and they are starting to wean themselves away from Nvidia as a means of accomplishing the goal.
Advanced Micro Devices (AMD) also appears to be emerging as a rather worthy competitor of Nvidia. Indeed, according to one source, AMD's AI offerings “are competitive on key hardware specs.”
And as I noted in a previous column, “Meta reportedly held talks about buying billions of dollars of Google's Tensor Processing Unit (TPU) chips.” The latter news suggests that Nvidia could indeed be facing a sizeable threat from Google, Amazon, and Microsoft.
The Bottom Line on NVDA Stock
Nvidia's forward P/E ratio of 41.7x may not be quite low enough to account for all of the uncertainty and challenges that it's currently facing. As a result, until the firm's outlook becomes clearer, I view the shares as worth holding but not worth buying.
On the date of publication, Larry Ramer had a position in: AMZN , AMZU . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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