Nvidia (NVDA) Stock: BofA Just Found Its Next $20 Billion Business — and It’s Not GPUs

TLDR

• Bank of America projects Nvidia’s Vera CPU could generate ~$20 billion in sales in the second half of fiscal 2027
• Nvidia may ship 4–5 million Vera CPUs in the first two quarters after launch, at $4,000–$5,000 per chip
• Agentic AI and reinforcement-learning workloads are driving a shift in demand from GPUs to CPUs
• A U.S. official confirmed only a “trivial” number of H200 chips have shipped to China under approved licenses
• Nvidia’s China revenue fell 53% to $4.55 billion in Q1, even as total revenue jumped 85% to a record $81.6 billion

---

Nvidia (NVDA) stock was down around 0.37% in premarket trading Wednesday at $211.01, with traders weighing a mixed picture in mega-cap tech despite broader index futures pointing higher.

NVIDIA Corporation, NVDA

Two separate developments are pulling investor attention this week — one about where Nvidia’s next big revenue stream is coming from, and another about where it isn’t.

Bank of America’s latest semiconductor note, led by analyst Vivek Arya, argues that Nvidia’s next major growth driver isn’t its GPU business. It’s CPUs.

As AI shifts from training large language models to deploying autonomous agents at scale, the compute bottleneck is moving. GPUs drove the first wave. CPUs, specifically Nvidia’s Vera chip, may drive the next.

BofA estimates Nvidia is targeting roughly $20 billion in Vera CPU sales during the second half of fiscal 2027. About half of that is expected to come from CPUs supporting existing GPU systems, with the rest coming from standalone CPU racks built for agentic AI and reinforcement-learning workloads.

The shipment projections are striking. Nvidia could ship 4 to 5 million Vera CPUs in just the first two quarters after launch — compared to 2.5 million Grace CPUs shipped in total to date. Average selling prices are expected to land between $4,000 and $5,000 per chip.

For context, Nvidia’s Data Center compute revenue hit $60.4 billion in Q1, accounting for about 74% of the company’s record $81.6 billion in quarterly revenue. The GPU business is still the engine. But BofA’s note suggests the CPU opportunity is no longer a footnote.

China: A Small Opening, With Limits

On the China front, Jeffrey Kessler, undersecretary of commerce for industry and security, told Bloomberg on Tuesday that only a “trivial” number of Nvidia H200 chips have shipped to Chinese customers under U.S.-approved licenses.

Kessler said applicants must meet strict national security requirements, including safeguards to prevent chips from reaching Chinese military end users. He declined to name buyers or provide exact shipment figures.

The H200 became exportable to China after President Trump cleared the chip in December. The Commerce Department later formalized that with rules requiring verified buyers and national security conditions.

Among the approved buyers, Reuters reported that ZTE Kangxun Telecom and Maginfra have received clearance to purchase advanced chips from both Nvidia and AMD.

Still, the door remains narrow. Nvidia has told investors it does not expect meaningful near-term AI processor revenue from China, partly because Beijing is actively pushing local buyers toward domestic chip alternatives.

What the Numbers Say

China revenue for Nvidia dropped 53% year over year to $4.55 billion in Q1, down from $9.66 billion a year earlier. Total revenue still surged 85% to a record $81.6 billion.

NVDA is up about 9% year to date but has been in the red over the past month.

Nvidia does not expect additional near-term AI processor revenue from China, even with H200 export approval now in place.