12:45 PM EDT, 08/28/2025 (MT Newswires) -- Nvidia ( NVDA ) is on course to reach $5 trillion in market capitalization by early 2026, Wedbush Securities said after the technology bellwether beat fiscal second-quarter estimates and outlined a strong revenue outlook despite ongoing headwinds related to the Chinese market.

The chip-making giant late Wednesday reported adjusted earnings of $1.05 per share for the quarter ended July 27, up from $0.68 a year earlier and above the FactSet-polled consensus of $1.01. Revenue jumped 56% to $46.74 billion, exceeding the Street's $46.05 billion view.

The company said that it didn't record any revenue from its H20 graphics processing units in China. The US government informed Nvidia ( NVDA ) in April that the chipmaker required a new license to export its H20 chips to China.

For the current quarter, the company anticipates revenue of $54 billion, plus or minus 2%, excluding H20 shipments to China. The consensus estimate at the time was for $53.43 billion.

Nvidia's ( NVDA ) results and guidance are "very important" for the broader tech industry as they point to an acceleration in the artificial intelligence revolution, Wedbush analysts, including Daniel Ives, wrote in a note emailed late Wednesday.

Last month, Nvidia ( NVDA ) became the first public company in the world to reach $4 trillion in market capitalization. Ives said its "well on its way" to hit a $5 trillion market cap by early next year.

"With AI infrastructure investments continuing to grow with the company expecting between $3 trillion to $4 trillion in total AI infrastructure spend by the end of the decade, the chip landscape remains (Nvidia's ( NVDA )) world with everybody else paying rent," Ives wrote in the note.

The company left H20 out of its third-quarter forecast due to geopolitical issues, Chief Financial Officer Colette Kress said on a late Wednesday earnings call.

If US-China situation improves, the company could generate $2 billion to $5 billion in H20 revenue in the current quarter, Kress told analysts, according to a FactSet transcript. "And if we had more orders, we can bill more," she added.

Earlier in August, Nvidia ( NVDA ) reportedly agreed to give 15% of its AI chip sales in China to the US government as part of a deal to get export licenses. However, Kress said on Wednesday that the Trump administration has not yet "published a regulation codifying such requirement."

Chief Executive Jensen Huang estimates China to be a roughly $50 billion opportunity this year. "If we were able to address it with competitive products and if it's $50 billion this year, you would expect it to grow, say, 50% per year as the rest of the world's AI market is growing as well," Huang told analysts.

Wedbush said Huang's comments on China shows the "massive eye-popping opportunity."

Nvidia's ( NVDA ) shares, which are up 34% so far this year, were down 1.3% in Thursday trading. Wedbush said that any decline in the company's stock is a "clear buying opportunity."

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